WHAT IS A LAPSED OFFER ?
A lapsed offer occurs when any one or all of the suspensive conditions have not been met within their stipulated time, for example:
- The Seller fails to sign before the effective offer date
- The bank issues a lower mortgage bond approval and the contract does not permit this
- If the seller is unable to obtain approved building plans in time
- If the buyer isn’t able to pay the deposit or balance of purchase price in time
- When the linked sale or linked registration is delayed
- The death of either party
CAN IT BE REINSTATED?
The court has held in Manna v Lotter:
“the expiry date in the contract had to be regarded as a stipulation for the exclusive benefit of the offeror (Buyer), which benefit he could elect to waive. The applicant, as offeror in this case had clearly intended to waive the benefit and his election to treat the contract as valid was legally sound.”
The clause in the agreement which made the offer acceptable for a limited period was for the exclusive benefit of the buyer, which benefit could then waived.
The Judge held that the buyer had an opportunity to decide, after the late acceptance, to either accept or reject the acceptance, which decision had to be made within a reasonable time.
WHAT WILL THE POSITION BE IF THE PURCHASER ACCEPTS THE OFFER MADE BY THE SELLER AFTER THE DATE STIPULATED?
The irrevocable character of the offer simply falls away and it becomes revocable at the instance of the seller. The seller remains at large to revoke the offer anytime before it is eventually accepted by the buyer.