Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537
Contract; formation; agreement; conditional agreement; universal terms; duty to co-operate; reasonable time for fulfilment of condition.
Facts: In April 1978, Perri agreed to buy a property in Cronulla from Coolangatta Investments (CI). The performance of this contract was made subject to the condition that Perri should first find a buyer for a property in Lilli Pilli that he owned. Finding a purchaser for the Lilli Pilli property proved difficult, especially since Perri initially wanted a high price. In July 1978, CI asked Perri to complete the purchase of the Cronulla property before August 8. When Perri failed to do so, CI told him that they were terminating performance of the contract. CI then sought a declaration from the court that they had validly terminated performance. Perri said he still wanted to complete the purchase of the Cronulla property, even though his Lilli Pilli property was not yet sold.
Issue: Had CI validly terminated further performance of their contract with Perri?
Decision: In the circumstances, performance had been validly terminated by CI, because Perri had failed to sell his Lilli Pilli property within a reasonable time, thereby unduly delaying the completion of the Cronulla sale.
Reason: Perri had not promised to sell his house in Lilli Pilli within any specified time, but the court held that it was an implied condition of the agreement that Perri would do all that was reasonable to bring about the sale of the Lilli Pilli property, and would do so within a reasonable time, thereby allowing the Cronulla contract to be completed. What is a reasonable time is treated as a question of fact and depends on what is fair to both parties in the circumstances. In this case, in which the seller could not deal with the Cronulla property while it remained subject to the sale of the Lilli Pilli property, the court held that a reasonable time had passed and that CI had therefore been entitled to terminate the contract.