Real estate agents have commonly had their own form of tender conditions. The tender conditions were generally similar and most included terms of sale very close to the ADLS/REINZ form of agreement for sale and purchase. A new standard tender form is welcome.
In a tender there are two contracts. The first contract is the tender process contract. The new tender form or process contract includes the usual provisions, such as:
- The vendor can reject any tender even if it is the highest tender
- The purchaser is obliged to submit a complying tender
- The vendor has the ability to ignore irregularities and accept non-complying tenders
- The vendor can negotiate with a tenderer
- The vendor can extend the time for acceptance
There is a whole body of law that surrounds the tender process contract. Parties are obliged to comply with this part of the contract in the same way as they would any other. If there is a breach of the tender contract this is actionable.
A tenderer/purchaser should ensure they are happy to have an offer made in this form kept open otherwise they should delete the vendor’s right to extend the dates. The tender form does not allow a tender to be withdrawn until after the tender acceptance date. The tender acceptance date is 5 working days after the closing date/time. That closing date/time can be extended by up to 20 working days by the vendor at any time before the closing date/time expires.
The standard terms for effecting the sale and purchase for the successful tenderer are very similar to those contained in the standard ADLS/REINZ agreement for sale and purchase. The vendor warranties include:
- that building work complies with the building consents and a code compliance certificate has been obtained.
- that the vendor has not given any consent or waiver which directly or indirectly affects the property
- notices and demands received by the vendor have been delivered by the vendor to the purchaser
As with the standard agreement for sale and purchase, vendors should check these warranties carefully before using this form.