12 contract-of-sale clauses that actually matter (and the 18 that do not)

Conveyancing in Australia generates a standard contract that runs 30 to 50 pages depending on the state and the complexity of the property. Most clauses are boilerplate. Twelve clauses carry the actual risk. A conveyancer's first task on any contract review is to read those twelve carefully and accept the rest as standard.

Here are the twelve, with what to look for in each and the typical negotiation room.

1. The cooling-off period

How long you have to walk away after exchange without penalty. The default varies by state (5 business days in NSW, 3 in VIC, 5 in QLD). At auction, cooling-off is waived. The clause to check: whether the period is the default or has been shortened.

Negotiate: rarely possible to extend. Possible to waive in exchange for a price concession.

2. The deposit amount and release timing

The deposit is typically 10% of the purchase price. The clause specifies whether it is held in trust or released to the vendor on exchange. A released deposit is unrecoverable if the vendor defaults before settlement. A trust-held deposit is recoverable.

Negotiate: deposit-in-trust until settlement should be the default. If the contract says deposit-released-to-vendor, push back.

3. The settlement date

Time between exchange and settlement. Default is 6 weeks in most states, 42 days in some. Shorter than 4 weeks is fast. Longer than 8 weeks is unusual.

Negotiate: a settlement date that gives you time to organise finance, insurance, and any building works. A 5-day or 10-day extension request is usually granted if you ask before exchange.

4. Special conditions (the "subject to" clauses)

The bespoke section of the contract. Common special conditions:

• Subject to finance approval (with a date by which you must confirm or rescind)
• Subject to satisfactory building and pest inspection
• Subject to sale of your existing property
• Subject to local council development consent

Negotiate: every special condition that protects you from a downside-case should be in the contract. The vendor's agent will resist. Hold your ground on finance approval and B&P at minimum.

5. Chattels and exclusions

What is included in the sale beyond the building itself. Dishwasher. Window furnishings. Curtains. Pool equipment. Garden shed. Spa.

Negotiate: walk the property with the agent's list in hand and confirm each item. The negotiation room is usually $1-5k of chattel value either way.

6. Easements, restrictions, and covenants

The clause confirming what easements, restrictive covenants, and rights of way affect the title. These should match what the title search reveals.

Negotiate: any easement that materially affects use should be disclosed in plain language, not buried in a schedule. Push for a plain-language summary if the contract only references the schedule.

7. Vendor warranties

The vendor's statements about the property: that they have title, that there are no outstanding orders, that there are no known structural issues, that the property is connected to services. The strength of these warranties varies by state and by individual contract.

Negotiate: weak vendor warranties (e.g. "to the vendor's knowledge") should be strengthened where possible. Strong warranties protect you for years post-settlement.

8. The section 32 / vendor's disclosure statement (VIC) or s149/10.7 certificate (NSW)

The mandatory disclosure document from the vendor. In VIC, the Section 32 lists encumbrances, easements, building permits, owners' corporation issues, planning information. In NSW the s10.7 (formerly s149) is the council planning certificate.

Negotiate: nothing to negotiate. Everything to read carefully. Items disclosed are deemed accepted. Items not disclosed may give you grounds to rescind.

9. Title search and dealings register

The clause confirming the legal title and the dealings registered against it. Includes mortgages, caveats, and any other encumbrances.

Negotiate: nothing on the title search itself. But if a caveat is registered, understand who placed it and on what grounds before exchange. A caveat can delay or block settlement.

10. Default and termination

What happens if either party fails to perform. Standard contracts give the vendor the right to retain the deposit and sue for damages if the buyer defaults. Some contracts give the vendor the right to charge penalty interest on a late settlement.

Negotiate: penalty interest above 10% per annum is excessive. Most contracts allow 6-8%. Default clauses that allow the vendor to retain the entire deposit AND sue for damages are aggressive but standard.

11. GST and adjustment of rates

Whether GST applies (typically only on new dwellings or commercial property) and how council rates, water rates, and strata levies are apportioned between vendor and buyer at settlement.

Negotiate: GST on a new dwelling is a vendor-side cost included in the price. Confirm this explicitly. Rate adjustments are standard but the calculation should be shown.

12. The risk transfer date

When the risk of damage to the property transfers from vendor to buyer. The default in most states is exchange (you bear the risk from contract day, not settlement day). This means you need insurance in place from exchange, not settlement.

Negotiate: in some states the default can be changed to risk-on-settlement, which is more favourable to the buyer. Worth asking your conveyancer if your state allows it.

The 18 clauses that do not matter (much)

Most of the rest of a standard contract is boilerplate: dispute resolution mechanics, notice provisions, GST treatment of deposit, capacity to contract, etc. These are standardised across state law and rarely worth focused negotiation effort.

Your conveyancer reads them to confirm they have not been varied. If they have been varied, your conveyancer flags it. If they have not, the form is accepted.

The 12 clauses above are the work your conveyancer does. The work you do is reading the contract once yourself, flagging anything that confuses you, and asking your conveyancer to address the specific items. Conveyancing is best when both parties (you and the conveyancer) read the contract. Most disputes after settlement come from buyers who only read the agent's summary.

A 90-minute read of the contract before exchange has the best ratio of effort-to-payoff of any pre-exchange task. Read it.