Generally, once a buyer signs a Section 32 contract in Victoria, it’s legally binding, and they cannot simply back out. However, there are limited circumstances where a buyer can legitimately terminate the contract, and it’s important for sellers to understand these possibilities as of December 2025.
In Melbourne, particularly within the Eastern Suburbs where Fletchers operates, the most common avenue for a buyer to withdraw is through a ‘subject to’ clause. These clauses, negotiated *before* the contract is signed, allow the buyer to terminate if certain conditions aren’t met – typically building and pest inspections, or finance approval. Currently in Melbourne, finance clauses are becoming less common as interest rates stabilise, but remain a factor. A solicitor can advise on the validity of these clauses. Beyond ‘subject to’ clauses, a buyer can only terminate with the seller’s consent, or through legal grounds like the property being misrepresented in the Section 32 statement. As of December 2025, we’re seeing increased scrutiny of Section 32s, and buyers are engaging conveyancers earlier in the process to minimise risk. The standard Victorian contract also includes a cooling-off period (typically three business days), during which a buyer can terminate, but this incurs a penalty of 0.25% of the purchase price. In 2026, sellers should be prepared for potential challenges to the contract, even after signing, and rely on their legal representation to navigate these situations.
While a signed contract provides significant security, understanding potential termination clauses and maintaining clear communication throughout the sales process is crucial for a smooth transaction.