Concluding negotiations

Although the analysis of an agreement relating to an interest in land in terms of an offer and an acceptance can frequently resolve problems, it is often more realistic to consider land transactions in terms of negotiations. Some of the following questions become critical:

1. (a)Have the parties concluded their negotiations;
2. (b) Have the parties agreed to the essential terms of the bargain;
3. (c) Have parties immediately consented to be bound by those terms or is the agreement subject to the following:
   1. (i) Some further terms to be agreed. or
   2. (ii) The preparation of a formal agreement.

An intended contract of sale of land was analysed in terms of concluded negotiations in Bridle Estates Pty Ltd v Myer Realty Pty Lt (1977) 51 ALJR 743. Jacobs J referred to proposals and counter-proposals rather than offer and acceptance and pointed out that parties used “the language of negotiation” rather than a contractual offer capable of acceptance. In order for the negotiation to be regarded as concluded, the parties should have at least agreed on the essential terms of the bargain with sufficient certainty.

The first step in enforcing an agreement for the creation and disposal of an interest in land is to establish a concluded agreement. This usually requires that it be proven that the parties reached a consensus on the essential terms of the bargain and each consented to be immediately bound by the agreement. (See Summergreene v Parker (1950) 80 CLR 304).

In transactions involving land it is usually more relevant to consider whether the negotiations between the parties have been concluded by a conditional or unconditional agreement. The vast majority of agreements dealing with land are concluded subject to the preparation and exchange of written contracts. This is more often in question rather than the existence of an offer and its acceptance.

In the event of a dispute when either party seeks to enforce an alleged concluded agreement, it often becomes necessary to trace the entire course of the negotiations. This requires the court to categorise the stages of the negotiations (if possible) into an offer, counter-offers and the acceptance of the last counter offer where the parties had reached a consensus in the form of a concluded oral or written agreement.

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