Snell v Sanders

Snell v Sanders concerned a dispute between the parties regarding a contract for the sale of land. The case was heard in the High Court of Australia.

The central legal issue before the High Court was whether the vendor, Sanders, was entitled to forfeit the deposit paid by the purchaser, Snell, under the terms of the contract, notwithstanding that the contract had been terminated due to the vendor's own default. Specifically, the court had to consider the interaction between a forfeiture clause and a termination clause within the contract, and whether the former could operate independently of the latter.

The High Court, by majority, held that the vendor was not entitled to forfeit the deposit. The majority reasoned that the forfeiture clause was intended to operate in circumstances where the purchaser defaulted, not where the vendor was in breach. To allow forfeiture in this instance would be to permit the vendor to benefit from their own wrong, which was contrary to fundamental principles of contract law. The court applied the principle that a party cannot rely on a contractual provision to their advantage when their own conduct has caused the event upon which that provision would operate.

The High Court ordered that the deposit paid by Snell be returned to him.