Deed of Sale – Understanding Special vs. Suspensive Conditions

In the intricate world of conveyancing and contracts of sale, clarity is paramount. Among the various components that can shape the terms of an agreement, special conditions and suspensive conditions often come into play.

While they may sound similar, these terms denote different mechanisms that can significantly impact the enforceability and execution of your contract. Understanding the distinction between the two is essential for anyone involved in legal agreements, whether you are the property seller, buyer, or transferring attorney.

Defining the Terms

Special Conditions are specific stipulations included in a contract that modify the general terms of the agreement. They provide additional requirements or obligations that must be met for the contract to remain valid. For instance, a special condition might state that the seller is selling the house together with its mirrors for aesthetic purposes. The validity of the agreement is not affected by the seller deciding not to leave the mirrors, other than a breach and default on the seller’s side.

Suspensive Conditions, on the other hand, refer to clauses that suspend the execution of the contract until a certain event occurs. This means that the contract is not fully binding until the specified condition is fulfilled. For example, a common suspensive condition in property sales might require the buyer to obtain a loan approval within a specified period. Until this condition is satisfied, neither party is obligated to perform their duties under the contract.

Key Differences

Nature of Enforcement:
Special Conditions: These conditions modify existing obligations. Failure to comply can result in breach of contract consequences, such as penalties or termination.
Suspensive Conditions: These conditions delay the entire contract's enforceability until the specified event occurs. If the event does not happen, the contract may become void.

Impact on Obligations:
Special Conditions: They create additional responsibilities for one or both parties, often leading to negotiations around compliance.
Suspensive Conditions: They essentially pause the agreement. If the condition isn’t met, the parties are typically released from their obligations.

Conclusion
In summary, while special conditions and suspensive conditions may seem closely related, they serve distinct purposes in contracts. Special conditions add layers of obligation, while suspensive conditions create dependencies on future events. A firm grasp of these concepts can lead to more effective contract negotiations and fewer disputes down the line. For anyone entering into a contract, understanding these nuances is not just advisable, it's essential.



Simonè Heloïse Janser,
LLB/LLM (Associate)