Contingency Clause

A contingency clause protects one or both parties by allowing them to withdraw or renegotiate the contract if certain conditions are not satisfied. Common contingencies include finance approval, building and pest inspections, valuation requirements and the sale of another property. These clauses give buyers confidence to commit without taking unnecessary risks, especially in private treaty sales. For sellers, contingencies introduce some uncertainty because the deal is not fully binding until the conditions are met. However, they also expand the buyer pool by making it easier for cautious or finance dependent buyers to participate. A skilled agent manages these conditions carefully, ensuring all deadlines, communication and documentation stay on track. When handled well, contingencies are simply a normal part of the selling process rather than a complication.

Practical Example

A buyer makes an offer on your home with a finance contingency clause allowing them five business days to secure formal approval. Your agent helps coordinate communication between the buyer’s broker, conveyancer and lender to ensure the process stays on schedule. Midway through the period, the bank requests additional documentation which briefly delays progress. Your agent steps in to clarify the urgency and encourages the buyer to provide the paperwork quickly. The finance approval is granted within the deadline and the contingency is formally satisfied. With the conditions met, the contract becomes unconditional, reducing your risk and allowing you to proceed confidently toward settlement.