Waterson v Batten

The New South Wales Court of Appeal considered a dispute between Waterson and Batten concerning the interpretation and enforceability of a contract for the sale of land. The central issue revolved around whether the contract, which included a clause requiring the purchaser to obtain finance, had been validly terminated by the vendor.

The court was required to determine whether the vendor had lawfully rescinded the contract on the grounds that the purchaser had failed to satisfy the finance condition within the stipulated timeframe. This involved an examination of the purchaser's efforts to obtain finance and whether those efforts were reasonable and in good faith, as well as the vendor's conduct in relation to the termination.

The Court of Appeal held that the vendor had not been entitled to terminate the contract. It reasoned that the purchaser had made reasonable and bona fide efforts to obtain finance, and that the vendor's purported termination was premature and based on an incorrect assessment of the purchaser's obligations. The court applied principles of contract law concerning the satisfaction of conditions precedent and the duty of good faith in contractual performance.

Consequently, the Court of Appeal found that the contract remained on foot and ordered that the vendor was not entitled to forfeit the deposit.