{"id":1689,"date":"2026-09-09T17:18:28","date_gmt":"2026-09-09T07:18:28","guid":{"rendered":"https:\/\/www.abkj.com.au\/articles\/?p=1689"},"modified":"2026-09-09T17:19:33","modified_gmt":"2026-09-09T07:19:33","slug":"off-the-plan-contracts-why-must-matters-for-developers","status":"publish","type":"post","link":"https:\/\/www.abkj.com.au\/articles\/off-the-plan-contracts-why-must-matters-for-developers\/","title":{"rendered":"Off-the-Plan Contracts: Why \u201cMust\u201d Matters for Developers"},"content":{"rendered":"<p>A recent decision of the Supreme Court of Queensland provides an important reminder for developers about the language used in off-the-plan contracts, particularly where obligations are tied to a Sunset Date.<\/p>\n<p>In <em>Malligan v Chevron Apartments Pty Ltd; Cantavenera v Chevron Apartments Pty Ltd<\/em> [2026] QSC 195, the Court considered two off-the-plan contracts for apartments in the Chevron One development on the Gold Coast.<\/p>\n<p>At the centre of the dispute was one word: <strong>\u201cmust\u201d<\/strong>.<\/p>\n<p>The contracts provided that the developer <strong>\u201cmust establish the Scheme, register the Plan and effect Settlement under this Contract by the Sunset Date.\u201d<\/strong><\/p>\n<p>When settlement did not occur by the respective Sunset Dates, the developer sought to terminate the contracts. The relevant buyers subsequently initiated proceedings in the Supreme Court challenging those terminations. The Court found that the clause imposed a positive obligation on the developer to achieve those steps by the Sunset Date, subject to the qualifications expressly contained in the contract.<\/p>\n<p>The decision highlights the importance of distinguishing between an obligation to achieve a particular result and an obligation merely to use reasonable efforts to achieve it.<\/p>\n<h2>Key Takeaways<\/h2>\n<ul>\n<li>Developers should carefully review contractual obligations requiring that something <strong>\u201cmust\u201d<\/strong> occur by a particular date.<\/li>\n<li>An obligation to achieve a result is different from an obligation to use <strong>reasonable efforts<\/strong> to bring that result about.<\/li>\n<li>A developer may not be able to rely upon a contractual termination mechanism where the circumstances activating that mechanism arise from the developer\u2019s own failure to comply with an earlier contractual obligation.<\/li>\n<li>Sunset provisions, developer termination rights and obligations to establish and register a community titles scheme should be drafted consistently and considered together.<\/li>\n<\/ul>\n<h2>What Happened in the Chevron One Development?<\/h2>\n<p>Chevron Apartments Pty Ltd was developing Chevron One, a proposed 40-storey residential development on Chevron Island containing more than 230 apartments.<\/p>\n<p>In 2021, it entered into off-the-plan contracts to sell proposed unit 1305 to Claudio Cantavenera and Maria Salonia for $840,000 and proposed unit 703 to Linda Malligan for $760,000.<\/p>\n<p>Each contract had a Sunset Date five years after the contract date.<\/p>\n<p>The contracts also contained clause 10.2, which provided:<\/p>\n<p><em>Subject to clause 16 and the Buyer complying with its obligations under clause 11.4(a), [Chevron] <strong>must establish the Scheme, register the Plan and effect Settlement under this Contract by the Sunset Date.<\/strong><\/em><\/p>\n<p>The relevant Sunset Dates passed without settlement occurring.<\/p>\n<p>That was important because section 217B of the <em>Body Corporate and Community Management Act 1997<\/em> (Qld) gave the purchasers a statutory right to terminate their contracts where settlement had not occurred within the applicable sunset period.<\/p>\n<p>Clause 25(c) of the contracts then sought to give Chevron a reciprocal right. It permitted Chevron to terminate during any period in which the purchaser was entitled to terminate under the Act.<\/p>\n<p>Chevron relied on that provision to purportedly terminate the contracts after the Sunset Dates had passed, in spite of the fact that the same contracts also said that Chevron <strong>must<\/strong> establish the Scheme, register the Plan and effect settlement by those Sunset Dates.<\/p>\n<p>The purchasers challenged those terminations.<\/p>\n<h2>\u201cMust\u201d Meant an Obligation to Achieve the Result<\/h2>\n<p>Chevron argued that clause 10.2 should not be treated as imposing a mandatory obligation upon it to achieve settlement by the Sunset Date.<\/p>\n<p>One argument raised was that the clause might instead impose something in the nature of an obligation to use reasonable efforts to bring about settlement.<\/p>\n<p>The Court rejected that construction.<\/p>\n<p>Freeburn J found that clause 10.2 imposed a clear and unambiguous obligation on Chevron to establish the Scheme, register the Plan and effect settlement by the Sunset Date.<\/p>\n<p>Importantly, the contracts used the expressions \u201cmay\u201d and \u201cmust\u201d deliberately in different provisions. The Court was not prepared to replace the language actually chosen by the parties with a lesser obligation simply because that construction may have produced a different commercial outcome.<\/p>\n<p>The Court ultimately declared that both contracts remained valid and binding.<\/p>\n<h2>An Obligation to Achieve a Result is Different from a Reasonable Efforts Obligation<\/h2>\n<p>The decision illustrates an important drafting distinction.<\/p>\n<p>A clause stating that a developer <strong>must<\/strong> establish a scheme, register a plan or achieve settlement by a particular date is capable of creating an obligation to achieve that result.<\/p>\n<p>By contrast, a provision requiring a developer to <strong>use reasonable efforts<\/strong> to achieve those matters imposes a different obligation. The developer is required to take the steps demanded by the applicable standard of endeavours, but does not necessarily guarantee that the particular outcome will be achieved.<\/p>\n<p>That distinction can become particularly important in lengthy developments, where registration or settlement may be affected by construction delays, approval processes, infrastructure requirements, financing issues or other circumstances arising during the development period.<\/p>\n<p>The Chevron One contracts contained extensive provisions protecting the developer in various circumstances, including project viability, financing, construction costs and approvals. However, clause 10.2 nevertheless expressly stated what Chevron <strong>must<\/strong> achieve by the Sunset Date.<\/p>\n<p>The Court was not prepared to rewrite that bargain after the event.<\/p>\n<h2>The Drafting Lesson for Developers<\/h2>\n<p>Developers preparing or reviewing off-the-plan contracts should therefore consider carefully whether an obligation is intended to:<\/p>\n<ol>\n<li>require the developer to <strong>achieve a specified outcome<\/strong>; or<\/li>\n<li>require the developer to <strong>use a specified standard of efforts<\/strong> towards achieving that outcome.<\/li>\n<\/ol>\n<p>Changing the drafting of one clause alone may not be sufficient. The contract should be considered as a whole, including:<\/p>\n<ul>\n<li>obligations concerning establishment and registration of the scheme;<\/li>\n<li>Sunset Dates and extension mechanisms;<\/li>\n<li>developer termination rights;<\/li>\n<li>purchaser termination rights;<\/li>\n<li>delays and matters outside the developer\u2019s control; and<\/li>\n<li>the interaction between contractual rights and statutory rights under the <em>Body Corporate and Community Management Act 1997<\/em>.<\/li>\n<\/ul>\n<p>The language used should accurately reflect the risk the parties intend the developer to assume.<\/p>\n<h2>Need Advice?<\/h2>\n<p>ABKJ Lawyers advises developers in relation to the preparation and review of off-the-plan contracts, community titles scheme developments and associated property and body corporate matters.<\/p>\n<p>If you are developing a community titles scheme project or require advice concerning your existing off-the-plan contract documentation, contact our <a href=\"https:\/\/www.abkj.com.au\/property-development-law.html\">property and development lawyers<\/a> on <a href=\"tel:(07) 5532 3199\">(07) 5532 3199<\/a> or submit an <a href=\"https:\/\/www.abkj.com.au\/contact-us.html\">enquiry online<\/a>.<\/p>\n<h3>Additional Resources:<\/h3>\n<ul>\n<li><a href=\"https:\/\/www.abkj.com.au\/articles\/should-i-buy-off-the-plan-or-not\/\">Things To Consider When Buying Off-The-Plan<\/a><\/li>\n<li><a href=\"https:\/\/www.abkj.com.au\/articles\/unfair-terms-in-off-the-plan-contracts\/\">Unfair Terms in Off-The-Plan Contracts<\/a><\/li>\n<\/ul>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>A recent decision of the Supreme Court of Queensland provides an important reminder for developers about the language used in off-the-plan contracts, particularly where obligations are tied to a Sunset Date. In Malligan v Chevron Apartments Pty Ltd; Cantavenera v Chevron Apartments Pty Ltd [2026] QSC 195, the Court considered two off-the-plan contracts for apartments in the Chevron One development on the Gold Coast. At the centre of the dispute was one word: \u201cmust\u201d. The contracts provided that the developer \u201cmust establish the Scheme, register the Plan and effect Settlement under this Contract by the Sunset Date.\u201d When settlement did&#8230; <a class=\"more-link\" href=\"https:\/\/www.abkj.com.au\/articles\/off-the-plan-contracts-why-must-matters-for-developers\/\">Continue Reading<\/a><!-- AddThis Advanced Settings generic via filter on wp_trim_excerpt --><!-- AddThis Share Buttons generic via filter on wp_trim_excerpt --><\/p>\n","protected":false},"author":1,"featured_media":1692,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1689","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-law"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Off-the-Plan Contracts: Why 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