Nominees under sale and purchase agreements

Posted on Friday, January 24 2014

And Or Nominee – Real Estate Sale and Purchase Agreements


It is common for a buyer to add the words “or nominee” under a purchase agreement when the buyer is not sure who will complete the purchase at the time the agreement is signed, or if the buyer wants to be able to form a company or trust to complete the purchase. Can the nominee enforce the agreement against the seller? A nominee is not a signatory to the original contract, and normally only the people who sign a contract can enforce it. However, the Contracts(Privity) Act 1982 says that if a party to a contract promises in the contract to give a benefit to someone who is not a party to the contract, the promise can be enforced by that other person as long as that person is “designated by name, description or reference to a class” in the contract. The Court of Appeal has said that the inclusion of the words “and/or nominee” after a purchasers name in a sale and purchase agreement for a property meant that the contract could be enforced by the nominee because of the Contracts (Privity) Act 1982. Although it is still possible for a buyer to assign the buyer’s rights under a contract to another person even if the words “or nominee” are not incluided, it is important that those words are included if the nominee wants to be able to enforce the contract against the seller himself/herself.

Mike Toepfer – Aspiring Law


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Expert's Bio

Mike Toepfer

Aspiring Law is a general practice firm, offering the best in legal services and advice to our local Upper Clutha community, as well as our national and international clients. We recently launched our new firm, after taking over AWS Legal’s Wanaka office. We’ve carefully tailored our firm’s services and culture to meet the needs of our business, and wider, community. Clients from further afield also draw on our specialist expertise, particularly advice and support around property, including large-scale developments, and agribusiness. As our clients have come to expect, the cornerstone of our new practice remains excellent, timely advice, underpinned by personalised, genuine service and support. Further to that, we’re really excited about building further on our community-based initiatives to educate and inform people on legal issues, and do our part in finding meaningful, innovative ways to support our area. Before that I was at large Auckland firm Hesketh Henry for 17 years - over 13 years as a partner and 10 years on the firm's board of management and as property team leader. I have specialised in all types of property transactions for the last 27 years.

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