Full case name Simanke v Liu | Judge(s) sitting Henry J | |
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Citation(s) (1994) 2 NZ ConvC 191,888 | ||
Simanke v Liu (1994) 2 NZ ConvC 191,888 is a cited case in New Zealand regarding cancellation of a contract under the Contractual Remedies Act, any deposit in excess of a customary deposit, in this case 10%, is refundable to the purchaser.
Contents
Background
Simanke agreed to sell a property to Liu for $650,000, with the sales agreement stating that a deposit of $300,000 be payable within 14 days.
The contract was later cancelled, and Siminake sued for the $300,000 deposit. Liu defended the claim by saying as under the Contractual Remedies At 1979, once a contract is cancelled, no party is obliged to perform any further on a contract. Simanke argued that the Act still requires the deposit to be paid.
Held
The court ruled that in New Zealand, the customary deposit is 10%, meaning in this case, $300,000 was not in the nature of a deposit, and so was not enforceable here. Furthermore, Simanke's claim was not helped either by the fact that the sales agreement had limited the forfeiture of deposit to be only 10% anyway. Simanke's claim was dismissed.