72 Hour Clause
(Article by Van Zyl Kruger Attorneys)
Although sellers obviously want the best price for the property in the shortest period, the reality is that cash purchasers are becoming an increasingly scarce commodity and sellers may have to seriously consider offers introduced subject to suspensive conditions.
Since it is clearly not always the best option for a seller to accept an offer subject to a suspensive condition, the practice has evolved to introduce the so-called 72-hour clause to help mitigate the risk of losing a possible future unconditional buyer. The introduction thereof into an agreement of sale of a property has the effect that the seller is entitled to call upon the purchaser to comply within 72-hours with all the suspensive conditions, if and when, a bona fide unconditional offer to purchase is received from a third party or lose out on the transaction.
A seller cannot ordinally demand of the purchaser, in the first instance, to pay a higher purchase price, if an unconditional second offer is received for a higher purchase price. That will only be possible if the so called “meet or beat” condition was introduced as part of the 72-hour clause, in which instance the purchaser will be compelled to at least match the price as may be offered by the third party offeree.
Getting your attorney involved as suggested will ensure that most of the typical challenges as may be encountered when notifying the purchaser in the first instance of the third party offer that was received and which have over time often been the subject of many a legal dispute, is effectively sidestepped.