Simanke v Liu

{{Short description|High Court case regarding New Zealand contract law}}

{{Infobox court case

| name = Simanke v Liu

| court = High Court of New Zealand

| date_filed =

| image = Coat of arms of New Zealand.svg

| date decided =

| full name = Simanke v Liu

| citations = (1994) 2 NZ ConvC 191,888

| judges = Henry J

| prior actions =

| subsequent actions =

| opinions =

| transcripts =

| Keywords =

}}

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. It held that any deposit in excess of a customary deposit, in this case 10%, is refundable to the purchaser.{{cite book |title=An introduction to the Law of Contract in New Zealand |edition=4th |last1=Chetwin |first1=Maree |last2=Graw |first2=Stephen |last3=Tiong |first3=Raymond |publisher=Thomson Brookers |ISBN=0-86472-555-8 |year=2006 |page=362}}

Background

Simanke agreed to sell a property to Liu for $650,000, with the sales agreement stating that a deposit of $300,000 was to be paid 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 Act 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.

References

Category:Court of Appeal of New Zealand cases

Category:New Zealand contract case law

Category:1994 in New Zealand law

Category:1994 in case law