In a recent decision of the District Court, it was held that a deposit that is electronically transferred is taken to be paid on the date of the transfer, not the date that the funds are cleared.
In this case the seller purported to terminate the sale contract on the basis that the deposit had not been paid ‘on the day the buyer signs the contract’. The contract has been signed at 2.08 pm on 19 October 2016 and the deposit was transferred into the specified trust account by the purchasers at 8.30 pm that same day, however the funds did not appear in the trust account until the following day. The sellers argued that because the funds did not appear until the day after the purchasers had signed the contract they were entitled to terminate.
The court in deciding that the deposit had been paid on the date the contract was signed emphasised that the purchasers were ready, willing and able to complete the contract which was indicated by their payment of the deposit on the date stipulated in the contract.
This is a timely reminder of how important it is to meet the timelines stipulated in contracts. It may now be useful for agents to consider specifically dealing with when electronic funds will be deemed to be received in the terms of the contract.
Please contact Miller Harris Lawyers on 07 4036 9700 if you require any further information on this issue.
