Stern v McArthur

The High Court of Australia considered the dispute between Stern and McArthur concerning the validity of a contract for the sale of land. The central issue revolved around whether the contract, which was subject to the vendor obtaining finance, was void for uncertainty or for failure to satisfy a condition precedent.

The Court was required to determine whether the clause requiring the vendor to obtain finance rendered the contract uncertain, and if not, whether the vendor's failure to obtain finance meant the contract was void. The judges also considered the implications of the vendor's subsequent conduct in attempting to terminate the contract.

The majority of the Court held that the clause was not void for uncertainty, as it imposed an obligation on the vendor to take reasonable steps to obtain finance. However, they found that the contract was voidable at the election of the purchaser because the vendor had failed to satisfy the condition precedent within the stipulated time. The Court applied principles of contract law relating to conditions precedent and the requirement for reasonable endeavours.

The High Court allowed the appeal, setting aside the orders of the Full Court of the Supreme Court of Victoria and remitting the matter to that Court for further consideration.