The current Contract for sale of Land clearly sets out the rights of a Vendor when a Purchaser defaults on the sale. The decision of Justice Windeyer in Kelly v Galafassi & Anor  NSWSC 680, now creates a precedent.
The Purchasers entered into a Contract to buy a property in Paddington for $6,350,000. However they had not sold their property prior to settlement and they were unable to complete the purchase due to insufficient finances.
The Contract was terminated by the Vendor and the Purchaser forfeited their deposit.
The Vendor then resold the Paddington property for $5,500,000 and sought to recover the deficiency in resale price from the original Purchasers and costs.
Standard clause 9 of the Contract for sale of land states that where the Purchaser defaults under the Contract the Vendor can sue the Purchaser for deficiency in resale price, reasonable costs and expenses or sue to recover damages for breach of contract.
The Vendor was awarded damages over $800,000 plus costs and expenses incurred on the aborted sale plus legal costs and land tax.