In fast paced transactional markets, the finance clause remains one of the most failure prone elements of a deal, and often the source of the costliest disputes. A recent WA District Court decision, Wahhab v BMD Nominees, offers timely and practical guidance for anyone working with finance conditional contracts, including agents, brokers, settlement teams and legal advisers.
One of the most important clarifications from the Court was what it means to apply for finance “immediately”. Crucially, “immediately” does not mean “instantly”. It means acting without unreasonable delay, measured against commercial reality rather than theoretical perfection. In Wahhab, a buyer who submitted their loan application within six business days, after first engaging a finance broker, was found to have acted entirely reasonably given the realities of contemporary lending, including iterative document requests, broker workflows, public holidays, and the need for cross border information.
The Court also reinforced what “best endeavours” truly requires. Too often, sellers assume any delay reflects a lack of effort. However, the modern finance process is seldom linear. Lenders request clarifications, brokers refine information, and applicants upload documents in stages. “Best endeavours” requires diligence, honesty, and constructive engagement, not a flawless application on day one. A buyer who responds promptly and cooperatively throughout the process will generally meet the standard.
Understanding this matters because, under the standard REIWA finance clause, these obligations operate as conditions precedent. A buyer who fails to comply risks losing the ability to terminate, and a seller who wrongly asserts non-compliance risks unnecessary delay, failed settlements and litigation. Clear expectations from the outset, combined with realistic timeframes informed by lending practice, help all parties avoid unnecessary conflict.
The practical takeaway for deal makers is simple. Evidence decides disputes. When finance becomes contentious, what matters most is the paper trail, including emails, document uploads, broker communications, lender requests, and timelines. Encouraging clients to maintain clear, contemporaneous records is one of the most effective ways to protect their position if something goes wrong.
If you would like to discuss any finance clause issues or recent developments affecting transactions, you are welcome to contact Lavan’s Property & Leasing team on 9288 6000.
By Kealeigh Barker – Special Counsel at Lavan
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