Can You Sell a Constrained QLD Site "As Is" Without Triggering Section 18 Risk?

Key Takeaways

• Silence can be actionable in context: Failing to disclose a known, material site constraint during a sale may expose the seller to liability under the Australian Consumer Law (ACL) where the circumstances give rise to a reasonable expectation of disclosure, or where the seller’s conduct would otherwise be misleading even without an express false statement.

• Contractual protections are limited: Standard "as is, where is" provisions and entire agreement clauses do not, of themselves, defeat a section 18 ACL claim, although properly drafted acknowledgements may assist on issues of reliance and causation.

• Apportionment and reduction arguments are qualified: If a buyer's consultant negligently overlooks a clearly disclosed constraint, the seller may have a stronger basis to argue for reduced responsibility for economic loss where the applicable proportionate liability or reduction framework permits. However, the position is more complex in Queensland and depends on the causes of action pleaded, the forum, and the interaction between the Competition and Consumer Act 2010 (Cth) and the Civil Liability Act 2003 (Qld). Intentional or fraudulent conduct remains a critical exclusion from those arguments.

• Strict limitation windows apply: Buyers who suffer financial loss due to deceptive silence typically have six years to initiate a recovery claim under section 236 of the ACL.

https://www.youtube.com/watch?v=GcNorcpKwKw

---

The preliminary due diligence report has just landed on your desk, confirming that an unmapped restrictive easement and undocumented cultural heritage intersect squarely across your proposed building footprint. The project yield is devastated, the feasibility model is broken, and The immediate commercial response may be to cut losses by selling the land to another developer. Selling the site "as is" may seem like the most commercially efficient exit strategy. However, executing that sale without appropriately managing disclosure of the adverse preliminary findings exposes your development company to a significant statutory risk: the buyer later discovering the constraint and alleging that your silence was misleading.

Immediate Triage: Disclosing Constraints While Managing a Distressed Site Sale

You have just received a preliminary due diligence report revealing a significant site constraint that severely compromises your project's feasibility. With the decision made to offload the site to another developer rather than proceed, your immediate challenge is determining exactly what you legally must disclose before signing the contract to avoid leaving a statutory risk open.

Contractual Exclusion Clauses vs Statutory Liability Under Section 18

When executing a rapid site disposal, development directors often assume that an "as is, where is" clause acts as a total shield against post-settlement claims. The intended function of an "as is" clause is to strictly allocate the physical risk of the site to the buyer. However, the enforceability of this contractual protection depends entirely on whether your pre-contractual conduct breached statutory prohibitions. Contract terms cannot exclude the operation of section 18 of the Australian Consumer Law (ACL). That said, contractual provisions may still be relevant at the factual level when a court assesses whether the buyer in truth relied on the alleged conduct and whether any loss was caused by it.

Section 18(1) of Schedule 2 of the ACL provides that "a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive". This broad prohibition extends to overall conduct and, depending on the circumstances, silence or non-disclosure may amount to misleading conduct.

If you possess a materially adverse report and remain silent while the buyer proceeds, a court may, in the circumstances, regard that silence as misleading conduct, rendering the "as is" clause unlikely to provide complete protection. Seeking tailored legal advice early in the disposal strategy can help navigate the tension between contractual risk allocation and statutory non-disclosure exposure.

In a Queensland land sale, a standard contractual "as is" clause is unlikely, by itself, to prevent a buyer from pursuing an ACL claim based on allegedly misleading conduct, including silence or non-disclosure that is misleading in the surrounding circumstances.

The 6-Year Limitation Period for Section 236 Economic Loss Claims

Potential exposure arising from non-disclosure does not necessarily end at settlement. If a developer remains silent about a known constraint and the buyer completes the acquisition, section 236 of Schedule 2 of the ACL may provide the buyer with a damages pathway for loss or damage suffered because of the misleading conduct, subject to the applicable 6-year limitation period. For practical purposes, the critical point is that the limitation period is not best described as a free-standing "discovery window".

The limitation period should be analysed by reference to accrual of the cause of action, which in misleading conduct cases commonly requires close attention to when loss or damage was first suffered. In some transactions, the buyer may not identify the constraint until months or years later, but later discovery does not itself convert section 236 into a pure discovery-based regime. Developers should therefore treat post-settlement exposure as potentially long-tail and obtain transaction-specific advice on when time is likely to begin running on the facts.

When Silence About Constraints May Become Misleading Conduct

Whether silence is misleading depends on the whole of the circumstances, including whether the seller's conduct creates a half-truth, whether the buyer is proceeding on an evident false assumption, and whether there is a reasonable expectation that the seller will disclose the omitted matter.

The distinction between robust commercial negotiation and misleading conduct can be difficult when selling constrained land, often acting as a primary trigger for statutory liability. A failure to disclose adverse facts may amount to misleading conduct, particularly if your marketing materials or representatives create a misleading half-truth or the circumstances otherwise give rise to a reasonable expectation of disclosure. At this stage of the transaction, you must understand exactly how seemingly innocent omissions during the sales campaign can inadvertently enliven liability, even when you have made no overtly false statements.

Withholding Adverse Planning Advice or Undocumented Heritage Findings

Example: You are negotiating a rapid off-market sale to a competing developer, and the buyer's acquisition manager remarks that the site looks like a "clean run" for a straightforward subdivision. You already hold a preliminary report indicating a high likelihood of undocumented artefacts, a constraint that could complicate civil works or expose the next owner to an environmental harm offence. If that misunderstanding is left uncorrected and the buyer proceeds on a false premise, the surrounding circumstances may support an allegation that the silence was misleading.

Where the circumstances create a reasonable expectation of disclosure, silence may amount to misleading conduct for the purposes of section 18. Managing these half-truths early is critical to avoiding protracted post-settlement disputes after the dust has settled on the transaction.

Agency Risk: When Your Project Marketer’s Nod Creates Corporate Liability

How can a real estate agent's silence become the seller's legal problem? A project marketer or selling agent acts as your representative, meaning their failure to correct a buyer's false assumption about the site can create a separate exposure channel for the development company. If an agent affirms, adopts or fails to correct a buyer's incorrect assumption in circumstances where a correction is reasonably required, that conduct may be attributed to the developer for ACL purposes.

A Queensland property developer may face liability if its selling agent or project marketer fails to correct a buyer's incorrect assumption about a site's constraints in circumstances where that conduct is legally attributable to the developer.

To mitigate this risk, developers should strictly control what information agents are authorised to confirm and ensure that buyer assumptions are directed into formal, documented due diligence channels rather than informal site-visit conversations.

Drafting Non-Reliance Clauses That Actually Frustrate "Reliance"

Expert insight: A non-reliance clause in a commercial land sale contract is designed to help address an allegation that the buyer relied on pre-contractual representations or omissions. However, the effect of this clause depends on careful drafting and the surrounding facts; it cannot contractually exclude the operation of section 18 of the ACL. Instead of operating as an absolute defence, a well-calibrated clause may be used evidentially to challenge the causation element of the buyer's claim. Courts may consider specific, targeted acknowledgements—where the buyer explicitly confirms they conducted their own independent investigations into defined risks—as evidence that the developer's silence did not actually cause the buyer's ultimate financial loss.

The Legal Framework: Why These Clauses Work Evidentially, Not as Shields

Before examining specific drafting, the threshold principle must be understood precisely. As a general proposition, a non-reliance clause or exclusion clause cannot contractually oust the operation of section 18 of the ACL or the remedial framework that follows from its contravention.

At the same time, authority also recognises an important distinction that defines the practical utility of these clauses. Whilst a non-reliance clause cannot contractually exclude liability, it can operate as evidence that the counterparty did not in fact rely on the allegedly misleading conduct, or did not suffer loss because of it.  No-reliance clauses and disclaimers may, as a matter of fact, affect whether a buyer can prove the necessary elements of liability: they may render conduct not misleading or deceptive, or lead a court to the conclusion that the claimant did not rely on the relevant conduct and therefore did not suffer loss caused by it.

The better question is whether the clause forms part of an evidentiary record that makes it harder for the buyer to prove reliance and causation in a section 18 claim.

Objective Factors Relevant to Defeating Reliance

When assessing whether a buyer in fact relied on vendor representations or instead on its own investigations, courts will examine the objective factual circumstances of the transaction rather than simply accepting a buyer's assertion of reliance.

The following objective factors are relevant to whether a buyer can establish reliance on a vendor's conduct:

• whether the buyer was a sophisticated, well-resourced party with specialist in-house capacity, which may make reliance on a vendor's representations inherently improbable;

• whether the buyer conducted its own investigations and formed its own view of the land's value independently of anything the vendor said;

• whether the buyer reviewed the vendor's project files, which openly disclosed gaps and deficiencies that any competent reviewer would have noticed; and

• whether the settlement period and absence of a due diligence clause in the contract indicated that the buyer was prepared to take the risk and rely on its own judgement rather than the vendor's representations.

Where a buyer has actual knowledge of potential inaccuracies and an express contractual mechanism to investigate and reject — but chooses not to use it — the buyer may face substantial difficulty proving reliance on the vendor's representations when entering the contract.

The acknowledgement clause and the broader contractual architecture must therefore together create a factual record consistent with the buyer having relied on its own investigations and expertise, not on vendor representations.

The Five Drafting Imperatives

Generic boilerplate is often of limited evidentiary value. A clause that simply states "the buyer has not relied on any representation by the vendor" is insufficient because it does not reflect the specific investigation the buyer actually undertook, and a court will be sceptical of its commercial reality. The following five requirements must be satisfied for an acknowledgement clause to carry genuine evidentiary weight:

1.      Specificity of risk categories. To maximise evidentiary value, the clause should identify the precise categories of risk the buyer has independently investigated. A clause referencing "contamination, cultural heritage, planning constraints and registered or unregistered easements and encumbrances" is significantly stronger than a clause using only generic language such as "the physical condition of the land."

2.      Positive confirmation of completed investigations. To carry stronger evidentiary weight, the clause should require the buyer to positively confirm that investigations have been undertaken and completed, not merely that they have had the opportunity to conduct them. The distinction between "the buyer has conducted" and "the buyer has had the opportunity to conduct" is material in the evidentiary record.

3.      Reference to specific documents reviewed. Where adverse reports or technical assessments exist in the data room, where appropriate, the clause should incorporate a defined term — "Data Room Materials" — defined by reference to a numbered index attached as a schedule. This creates a direct evidentiary link between the contractual acknowledgement and the specific documents the buyer's consultants had access to.

4.      Acknowledgement of the buyer's expertise. The clause should record that the buyer is a sophisticated commercial party who has engaged specialist consultants. This element mirrors an objective factor courts have weighed: the implausibility of an experienced developer actually relying on a vendor's general representations rather than their own professional assessment.

5.      Execution by authorised signatories. As a matter of drafting prudence, the acknowledgements should appear in the contract body — rather than only in a general conditions schedule — and should be executed by persons with authority to bind the relevant entity. Acknowledgements buried in general conditions may be treated by courts as standard boilerplate to which no particular weight should be given.

Example Clause: Targeted Acknowledgement for Site Constraint Risk Categories

The following is an example of a clause designed to create the evidentiary record described above. It is provided as a drafting framework only. All clause language must be reviewed and adapted by a solicitor having regard to the specific facts of the transaction, the content of the data room, and the buyer's profile. It should not be treated as a mechanism for avoiding disclosure of material information where the circumstances otherwise give rise to a real risk of misleading or deceptive conduct.

Buyer's Acknowledgements — Independent Investigations

The Buyer acknowledges and confirms to the Vendor, as representations made on the date of this Contract and repeated on the date of settlement, that:

(a) Prior to executing this Contract, the Buyer and its appointed consultants were provided with access to the Data Room, the index of which is set out in Schedule [•] to this Contract (Data Room Index);

(b) The Buyer has had a reasonable and adequate opportunity to review all materials in the Data Room including, without limitation, all preliminary engineering, geotechnical, environmental, contamination and cultural heritage reports and assessments identified in the Data Room Index;

(c) The Buyer has, at its own cost, retained independent specialist consultants with relevant expertise to undertake its own assessment of, and provide it with independent advice in relation to:

(i) the environmental and contamination status of the Land;

(ii) the existence or potential existence of cultural heritage matters, registered or unregistered, affecting the Land or any proposed works on the Land;

(iii) any registered or unregistered easements, encumbrances, infrastructure constraints, or third-party access rights affecting the Land or the Buyer's proposed use of the Land; and

(iv) any planning, zoning or development approval constraints that may affect the development yield of the Land;

(d) The Buyer enters into this Contract in reliance on the outcomes of its own independent investigations and the advice of its own retained specialist consultants in respect of the matters referred to in paragraph (c), and not in reliance on any statement, representation or omission made by or on behalf of the Vendor regarding those matters;

(e) The Buyer is a sophisticated commercial party with substantial experience in the acquisition, development and disposal of land in Queensland, and has had the benefit of independent legal, technical and financial advice in connection with this transaction; and

(f) The Buyer has not entered into this Contract as a result of any representation made by the Vendor or any agent of the Vendor in relation to the matters referred to in paragraph (c), and the Buyer expressly acknowledges that the Vendor has not made any representation, warranty or undertaking to the Buyer in relation to those matters other than as expressly set out in this Contract.

Critical Limitations on These Clauses

Even a correctly drafted acknowledgement clause will not protect a vendor whose conduct crosses into deliberate concealment. Where a vendor withholds an adverse report that was never made accessible to the buyer, a court is likely to find that the circumstances gave rise to a reasonable expectation of disclosure — and that it is no answer for the vendor to say that the buyer could have conducted its own investigations to discover what the vendor already knew. The clause above derives its evidentiary force from the factual reality of genuine access; it cannot manufacture that evidentiary foundation where genuine access was never given.

Structuring the Data Room to Support a Defensible Disclosure Process

Where a known preliminary constraint exists, the architecture of your data room becomes a critical evidentiary tool. The objective is not to obscure the issue, but to ensure that material information is made genuinely accessible to the buyer and its consultants before the contract becomes unconditional, creating a factual record relevant to reliance, causation and any available allocation-of-responsibility arguments. This section sets out a practical framework for structuring disclosure in a way that is commercially disciplined and legally defensible.

Flooding the Data Room vs Providing Specific Notice

Practical warning: The tactic of deliberately burying an adverse engineering or cultural heritage report deep within hundreds of unindexed, irrelevant files is a dangerous approach that may backfire entirely. A court may regard intentional data dumping or deliberate obfuscation as part of the misleading conduct itself, rather than as effective disclosure. If the data room is structured to hide the constraint rather than facilitate genuine due diligence, your attempt to shift the discovery burden is likely to fail under statutory scrutiny.

Leveraging Proportionate Liability if the Buyer's Consultant Misses the Constraint

This area is highly technical. The availability of apportionment, contribution or reduction arguments depends on the cause of action pleaded, the statute invoked, and the forum in which the claim is brought. The discussion below is therefore necessarily general.

If you structure the data room carefully and clearly index the adverse report, what happens if the buyer's consultant simply fails to read it? That fact pattern may improve the seller's defensive position, but it should not be presented as a clean or automatic apportionment answer in a Queensland transaction.

At the federal level, section 87CB(1) of the Competition and Consumer Act 2010 provides that certain section 236 claims for economic loss or property damage caused by conduct contravening ACL section 18 are apportionable claims. If a buyer's town planner, engineer or valuer negligently overlooks a properly disclosed constraint, the seller may seek to argue that the consultant is a concurrent wrongdoer and that, if the applicable statutory pathway is engaged, responsibility should be apportioned on a just and equitable basis.

However, Queensland practitioners also need to account carefully for the interaction between the federal regime and the Civil Liability Act 2003 (Qld). For claims brought under the Fair-Trading Act 1989 for contravention of the Australian Consumer Law (Queensland), section 32F of the Civil Liability Act 2003 (Qld) materially complicates the position by providing that a concurrent wrongdoer who contravenes section 18 of the Australian Consumer Law (Queensland) is severally liable for the damages awarded against another concurrent wrongdoer. The availability and utility of apportionment arguments will depend on the statutory pathway, the pleaded causes of action and the forum.

The more defensible practical point is therefore this: if the adverse report was clearly indexed, genuinely accessible, and actually provided to the buyer's consultants, those facts may materially assist the seller on reliance and causation and, depending on the statutory pathway engaged, may also support arguments about concurrent wrongdoing or reduction of loss. They do not justify treating apportionment as an automatic answer.

Critical limitation — intentional or fraudulent causation excluded from apportionment: even where the federal proportionate liability regime is engaged, section 87CC of the Competition and Consumer Act 2010 removes the benefit of apportionment for a concurrent wrongdoer who intended to cause the relevant economic loss or property damage, or who fraudulently caused that loss or damage. If a court finds that the seller intended to cause the relevant economic loss or property damage, or fraudulently caused that loss or damage, the apportionment argument may fail entirely. Deliberate concealment may be relevant to that characterisation.

Section 137B of the Competition and Consumer Act 2010 may also permit reduction of damages recoverable under section 236(1) where the claimant's failure to take reasonable care partly caused the economic loss or property damage, but it too is subject to an important carve-out. That provision only assists where the seller did not intend to cause the relevant loss or damage and did not fraudulently cause it. If the seller intended to cause the relevant loss or damage, or fraudulently caused it, section 137B may provide no reduction at all.

Using Specific Contractual Acknowledgements for Identified Risks

Expert insight: Drafting targeted acknowledgements in a commercial property or infrastructure transaction is a nuanced strategy aimed at documenting the parties' allocation of investigation responsibility for identified categories of risk.

The enforceability of these clauses depends heavily on their precision; their protective effect is conditional and remains subject to the limitations found at Schedule 2, section 18 of the Competition and Consumer Act 2010. By requiring the incoming party to explicitly acknowledge they have conducted independent investigations into specific risk categories—such as contamination or easements affecting the land—a developer may be better positioned to evidentially sever the causal link between their silence and the buyer's loss.

The Data Room as a Legally Defensible Evidentiary Architecture

By contrast, a well-structured data room may help show that the adverse information was genuinely accessible, that the buyer's consultants had a real opportunity to identify it, and that any failure to do so bears on reliance, causation and, where legally available, any apportionment or reduction argument.

The most effective mechanism for managing these risks is to commit material information to writing, make it accessible through a structured and indexed disclosure process, and formally document that access through the contract. The following practical framework translates those principles into a Queensland developer context.

Structuring the Data Room Index: Minimum Requirements for Legal Defensibility

The data room index is the evidentiary cornerstone of the disclosure strategy. At minimum, a seller seeking to maximise the evidentiary value of its disclosure process should ensure the index satisfies the following requirements before the contract is signed:

Numbered document entries. Every document in the data room must appear as a discrete, numbered line item in the index. The entry must include the document title, its

date, and a brief description of its subject matter. A document described only as "Report 14" carries significantly less evidentiary weight than one described as "Preliminary Cultural Heritage Assessment — [Site Address] — [Consultant Name] — [Date]."

No burying of adverse reports. The adverse report — whether it is a preliminary engineering assessment, a cultural heritage preliminary findings report, or a geotechnical investigation — should appear as a clearly identifiable entry in the index. It must not be inserted within a folder containing dozens of irrelevant administrative documents with no separate indexing. A court will assess whether the structure of the data room facilitated genuine discovery or was designed to frustrate it.

Logical folder taxonomy. The data room should be organised under a clear folder taxonomy with headings that correspond to the risk categories identified in the contractual acknowledgement clause. For example, a folder structure might include: Planning and Development Approvals; Environmental and Contamination; Cultural Heritage; Title, Easements and Encumbrances; Engineering and Geotechnical; Financial. Where an adverse report exists under any of these headings, it should be prominently positioned within that folder rather than buried within less significant materials.

Access log preservation from the moment the data room opens. The platform used to host the data room should maintain a timestamped, user-specific access log recording which documents each user downloaded or opened and when.This log is the direct evidentiary rebuttal to a buyer's claim that they did not see the adverse report. Before the data room opens, confirm in writing with the platform provider that logging is enabled for all user activity and that logs will be preserved and exportable for at least seven years.

Written confirmation of access provided. When granting access to the data room, issue a letter or email to the buyer confirming: (a) access has been granted; (b) the full index is available; and (c) the buyer is expected to review all materials before the contract becomes unconditional. Retain a copy of this communication on file.

Example Clause: Contractual Acknowledgement of Data Room Access

The following clause is designed to be inserted into the contract body — not in a general conditions schedule — and to operate alongside the specific risk category acknowledgement in the previous section. Together, the two clauses create the factual record that supports both a challenge to reliance and, where relevant, a proportionate liability argument. It is provided as a drafting framework only and must be reviewed and adapted by a solicitor.

Data Room Access and Reliance

(a) The Vendor has made available to the Buyer, through the online data room platform operated by [Platform Provider] (the Data Room), all documents listed in the Data Room Index at Schedule [•] to this Contract.

(b) The Buyer acknowledges that:

(i) access to the Data Room was provided to the Buyer and its nominated consultants from [date] to [date];

(ii) the Buyer has had a full and adequate opportunity to review all documents in the Data Room prior to executing this Contract;

(iii) the Buyer has retained independent specialist consultants with relevant expertise to review the Data Room materials on its behalf; and

(iv) the Data Room Index at Schedule [•] accurately records all documents made available to the Buyer.

(c) The Buyer confirms that it enters into this Contract having reviewed, or having had the opportunity to review, all documents listed in the Data Room Index, and that the Buyer's decision to enter into this Contract was made in reliance on its own assessment of those documents and the independent advice of its own consultants, and not in reliance on any representation, statement or omission of the Vendor.

(d) The Vendor makes no representation and gives no warranty regarding the completeness or accuracy of any document in the Data Room other than as expressly stated in this Contract, and the Buyer acknowledges that it has not relied on any such implied representation or warranty.

How Targeted Indexing Interacts with Infrastructure and Constraint Risks

In a site disposal involving an identified infrastructure constraint — whether a legacy drainage easement, a council infrastructure charge notice, a subsurface utility corridor, or an unresolved infrastructure agreement under the Planning Act 2016 (Qld) — the same indexing principles apply with heightened precision. The specific infrastructure document must be identified by its own line item in the index, not grouped within a generic "Miscellaneous" or "Other" folder.

Where the adverse constraint arises from a preliminary investigation report (rather than a registered instrument), the challenge is that the document may not appear on a title search or a standard DNRM search — meaning a buyer's solicitor conducting only standard searches will not necessarily encounter it. This is precisely why the data room index entry, the contractual acknowledgement clause, and the access logs must collectively establish that the buyer's specialist consultant was given the specific opportunity to read the document and assess the constraint.

If a buyer's town planner, engineer, or valuer is granted access to a clearly indexed data room containing a preliminary constraint report, receives confirmation of access in writing, enters into a contract that expressly acknowledges review of the data room materials, and subsequently fails to read or assess the report, those facts may materially assist the developer in arguing reliance, causation and—where the applicable legal framework permits—proportionate liability or reduction of recoverable loss. As noted elsewhere in this article, that argument remains subject to the critical limitation in section 87CC: it is available only where the developer did not intend to cause the relevant economic loss or property damage and did not fraudulently cause that loss or damage.

Implementation Checklist Before the Sales Campaign Commences

Before executing any contract for the disposal of a site with a known adverse preliminary finding, confirm the following steps have been completed:

•  All documents placed in the data room are entered as discrete numbered line items in the Data Room Index

•  The adverse report is identified by a descriptive title, date and author in the Data Room Index — it is not buried within a bulk upload or generic folder

•  The data room platform has access logging enabled and logs are being preserved from the moment of first access

•  A written confirmation of data room access has been sent to the buyer and its nominated consultants

•  The Data Room Index has been incorporated into the contract as a schedule

•  The contractual acknowledgement of data room access has been reviewed by a solicitor and inserted into the contract body

•  The specific risk category acknowledgement clauses have been reviewed by a solicitor and inserted into the contract body

•  All acknowledgements have been executed by persons with authority to bind the buying entity

•  The access log for the data room has been preserved and backed up at the point of exchange

Responding to a Post-Settlement ACL Claim

If the dispute crystallizes after settlement: settlement has occurred, the buyer's earthworks team has encountered undocumented cultural heritage, and their solicitor has served a letter of demand seeking to unwind the transaction under the ACL.  At this juncture, the focus shifts entirely from data room risk prevention to careful litigation response. You need clear procedural steps to protect your commercial position and limit the impending damages claim.

Challenging the Reasonableness of the Buyer's Case on Reliance and Causation

How do you challenge a buyer's claim that your silence led them to form a false expectation about the site's yield? The stronger strategy is usually to attack the factual reasonableness of the buyer's case on reliance and causation, rather than to overstate the operation of the ACL's "future matters" provisions.

In practice, the seller should focus on the buyer's actual due diligence conduct, the scope of its consultant retainer, the material made available in the data room, the buyer's sophistication, and the extent to which the buyer had already formed its own commercial view of the site before contract. If the buyer's internal yield assumptions were speculative, unsupported by planning or technical advice, or maintained despite access to contrary material, those facts may materially weaken the buyer's attempt to prove that the seller's conduct caused the loss.

The key forensic point is not merely that the buyer's view of the site's development potential proved wrong. It is that the surrounding facts may show the buyer was relying on its own assessment, accepting a known due diligence risk, or proceeding despite warning signs that should have prompted further investigation.

Immediate Steps When Served with a Section 236 Damages Demand

When a section 236 demand lands in your inbox, swift procedural action is required to preserve your defensive options.

• Do not engage in informal, without-prejudice telephone calls with the buyer or their agent, as these conversations can be used against you.

• Immediately freeze and preserve all digital access logs for the data room to prove exactly which files the buyer's consultants opened and when.

• Quarantine all internal emails and text messages regarding the initial discovery of the site constraint.

• Review the specific wording of your contract's non-reliance and "as is" clauses to assess the available evidentiary and causation arguments.

• Promptly obtain legal advice from a specialist construction and property lawyer before responding formally to the demand letter.

Conclusion

Discovering an unmapped restrictive easement or undocumented cultural heritage footprint midway through a feasibility study is a difficult commercial reality. The instinct to immediately flip the site "as is" and recoup capital is understandable, but executing that disposal without managing the statutory non-disclosure risk can lead to serious post-settlement litigation

As this article explains, standard contractual "as is, where is" provisions do not, by themselves, prevent an Australian Consumer Law claim based on misleading conduct. Silence regarding a known, material constraint may expose a seller to a section 236 damages claim where, in context, the silence is misleading, subject to the applicable limitation period. However, by structuring the data room so that material information is genuinely accessible, preserving a clear disclosure record, analysing carefully whether any apportionment or reduction arguments are available on the pleaded causes of action, and drafting precise, targeted contractual acknowledgements, you can significantly strengthen your defensive position.

If you have identified a material site constraint and are considering a sale, the prudent next step is to obtain transaction-specific legal advice on disclosure, data room structure, and contract drafting before the sales campaign commences.

---

FAQs

Does an "as is, where is" clause protect a developer from non-disclosure claims?

An "as is, where is" clause is designed to allocate aspects of site risk to the buyer, but it does not, of itself, exclude statutory liability under section 18 of the ACL. If a seller fails to disclose a known, material constraint in circumstances that are misleading, the clause may provide limited assistance. Its practical value depends heavily on the surrounding pre-contractual conduct and the factual record on reliance and causation.

How long does a buyer have to sue a developer for silence that is misleading in context?

Under section 236 of Schedule 2 of the ACL, a party who suffers loss or damage because of misleading conduct may have up to 6 years to commence a damages claim, subject to the way the cause of action is characterised and when the loss is suffered on the facts. It is safer to describe this as a limitation period tied to accrual of the cause of action and the loss suffered, rather than as a pure discovery rule.

Can a real estate agent's silence create legal liability for the development company?

Yes, a project marketer or selling agent acts as your representative in trade or commerce. If the agent fails to correct a buyer's false assumption about the site's constraints, that silence may be attributed to the developer, potentially enlivening direct corporate liability under the ACL.

How does proportionate liability reduce a developer's exposure in a non-disclosure claim?

In some cases, a seller may seek to argue that responsibility for economic loss should be reduced where a buyer's consultant negligently misses a clearly indexed adverse report. However, that issue is not straightforward in Queensland. While the Competition and Consumer Act 2010 contains a federal proportionate liability regime for certain section 236 claims, Queensland's Civil Liability Act 2003, including section 32F, may materially affect the position depending on the cause of action pleaded. Any such argument is also subject to a critical limitation: section 87CC of the Competition and Consumer Act 2010 provides that a wrongdoer who intended to cause the economic loss, or who fraudulently caused it, cannot benefit from apportionment at all. Developers whose conduct is found to have involved an intention to cause the relevant economic loss or property damage, or to have fraudulently caused that loss or damage, may therefore find this defence entirely unavailable.

Are "entire agreement" clauses effective against ACL claims?

While an "entire agreement" clause may assist in defining the contractual bargain, it cannot exclude the operation of the ACL. However, well-drafted acknowledgements may be relevant evidence on whether the buyer in fact relied on the alleged conduct and whether that conduct caused the claimed loss.

What is the danger of burying a negative report in a massive data room?

Deliberately flooding a data room with unindexed or irrelevant files to obscure a deal-killing report is a high-risk tactic. A court may regard intentional data dumping as part of the misleading conduct itself, rather than as effective disclosure.

---

This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law

---