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Is an Oral Contract for Sale of Land Enforceable?

There is a general statutory requirement that for a contract for sale of land to be enforceable, it must be in writing and signed by the parties (section 54 of the Conveyancing Act 1919). There is however an exception to this requirement under the common law of part performance (section 23E of the Conveyancing Act 1919). 

In the case of Pipikos v Trayans [2018], the High Court affirmed the test for part performance as established by Lord Selbourne in Maddison v Alderson (1883).  This means that an oral or unsigned agreement for the sale of land may be enforceable if the agreement has been partly performed and “the acts relied upon as part performance [are] unequivocally, and in their own nature, referable to some such agreement as that alleged”.

This test was recently applied in the case of Phung v Phung [2019]. In upholding an oral agreement for the sale of a home unit, Justice Darke of the Supreme Court found that payments made by the plaintiff together with payment of rates and strata levies, the taking of possession and the carrying out of renovations to the property were sufficient acts of part performance to establish the agreement as alleged by the plaintiff. 

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