Articles & FAQs

Am I locked into the Contract once my offer is accepted?

A property is listed for sale. You find its listing on one of the real estate websites, such as domain or and make an appointment to inspect.   Following the inspection you engage in several price negotiations with the nominated agent.

These discussions finalise when the real estate agent advises you that the ‘offer has been accepted’.

While most people would regard this assurance to mean that the property has been sold (for surely the offer has been accepted?) this is not so, as land transactions in New South Wales are of a special kind.

In NSW residential conveyancing it is accepted that there is no agreement until the formal exchange of contracts. The law on this point was developed in the English case of Eccles v Bryant and Pollock [1948] Ch 93, subsequently confirmed by NSW Courts.

In Eccles v Bryant the Court said:

“When parties are proposing to enter into a contract, the manner in which the contract is to be created so as to bind them must be gathered from the intentions of the parties, express or implied. In such a contract as this, there is a well-known, common and customary method of dealing; namely, by exchange, and anyone who contemplates that method of dealing cannot contemplate the coming into existence of a binding contract before the exchange takes place.

It was argued that exchange is a mere matter of machinery, having in itself no particular importance and no particular significance. So far as significance is concerned, it appears to me that not only is it not right to say that the exchange has no significance, but it is the crucial and vital fact which brings the contract into existence.

As for importance, it is of the greatest importance, and that is why in past ages this procedure came to be recognised by everybody to be the proper procedure and was adopted. When you are dealing with contracts for the sale of land, it is of the greatest importance to the vendor that he should have a document signed by the purchaser, and to the purchaser that he should have a document signed by the vendor. It is of the greatest importance that there should be no dispute whether the contract had or had not been made and that there should be no dispute as to the terms of it. This particular procedure of exchange ensures that none of those difficulties will arise.”

The process of exchange occurs when the vendor and purchasers contracts have been signed, dated and ‘exchanged’ with one another (the buyer’s contract issued to vendor’s solicitor and visa versa).

Often the real estate agent will conduct the exchange of contracts, and if not, the exchange will be carried out by the respective conveyancers and solicitors.

In the example above, there is no agreement, and the property not sold, until the contracts have been signed and exchanged. As was said in eccles v Bryant the exchange of contracts is the crucial and vital fact which brings the contract into existence