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Special Conditions: How capitalised letters can change the meaning of a contract

Special Conditions: How capitalised letters can change the meaning of a contract

We are often asked whether there is a difference between using capitalised and non-capitalised words when drafting special conditions in contracts for the sale of land.

When a dispute arises between a buyer and seller of a property, the meaning of terms used in the special conditions of the contract are crucial in determining the intentions of the parties to the contract.

Some words are defined in the general conditions are each word defined will start with a capital letter. For example, the term “Settlement Date” is a defined term in clause 3.5 of the Joint Form of General Conditions. It means the date on which each party must complete settlement being the date nominated in the contract.

The term “settlement date” (without capital letters) means the actual date of settlement of the property.

So if you have a condition saying a white ant report is to be done 5 days prior to the settlement date (without capital letters), it will mean 5 days before the actual day of settlement and not 5 days before the Settlement Date stated in the contract

The difference can significantly effect the outcome for the parties.

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