EAA Publications
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| The Freshman |
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| To safeguard your interests,
leave no blank spaces in contract |
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 After
viewing a number of properties introduced by an estate agent,
Ms Chu narrowed down her choices to two units. The asking price
of both units was $1.1 million. Ms Chu knew that a considerable
saving in stamp duty could be made if the price could be reduced
to $1 million or less. (Note: the stamp duty at a consideration
of $1 million or less is at a flat rate of $100; the stamp duty
at a consideration of over $1 million is calculated on prescribed
rates in proportion to the price.) Ms Chu therefore asked the
agent to persuade each vendor to bring the price down to less
than $1 million. The agent told Ms Chu that, in order to show
the vendors that she was serious in her offer, Ms Chu should
draw a cheque for $20,000 as initial deposit but leave the payee
blank. He also asked her to sign a provisional agreement for
sale and purchase for each of the two units but leave the spaces
for the completion date and the selling price unfilled.
The agent then called the two vendors and, after much bargaining,
one of the vendors finally agreed to sell his unit for $1 million.
The agent immediately produced the relevant agreement and asked
the vendor to sign on it. When this was done, he handed the
vendor Ms Chu's cheque. However, when the agent told Ms Chu
about the deal, Ms Chu said that she had never agreed to the
price of $1 million and as the agent made the decision for her
without her authorization, she would not be bound by the agreement.
The agent, on the other hand, insisted that Ms Chu had instructed
him orally that she agreed to the price of $1 million.
The two sides stuck to their respective versions and it was
difficult for an outsider to judge who was in the right. Nevertheless,
it was unwise of Ms Chu to sign the agreements with blanks left,
which was the main cause for the dispute. Since the agreement
did bear Ms Chu's signature, it would be difficult for her to
prove that she had not agreed to the terms in the agreement.
To go back on the agreement might amount to breach of contract.
In view of the above, the Estate Agents Authority suggests that,
before signing an agreement, the details must first be thoroughly
discussed and the various clauses in the agreement understood
by the parties concerned. If the agreement is signed in haste
before the terms have been agreed on or if blanks are left in
important clauses, the consumer will only be inviting trouble.
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