Default most often means failing to settle on the appointed day. The contract imposes interest for default without the need for a demand, and sets a notice procedure before the contract can be ended. The standard position is a default notice giving a set period to remedy the default, which may state that the contract will be rescinded if the default is not remedied, so that rescission follows automatically on expiry without a second notice.
On rescission after a buyer's default, the deposit may be forfeited up to a capped proportion of the price, and the vendor must bring the forfeited amount into account when calculating damages, reflecting the common law position in Mallett v Jones, followed in Cowan v Stanhill Estates. Full forfeiture of a tenth of the price where a smaller deposit was paid was doubted in Simcevski v Dixon (No 2), which is why forfeiture is capped. The deposit is forfeited whether or not paid, so an unpaid part may still be recovered, as in Bot v Ristevski.
A vendor who defaults can likewise be served and the buyer may seek to rescind or to claim. Before ending a contract the serving party must have done everything on its own part and given the other a proper opportunity to settle.
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The notice steps and periods must be followed exactly, because a defective notice can invalidate the rescission. Claims for compensation beyond interest and costs are generally pursued after settlement rather than used to adjust the price at settlement.
Law referenced: Sale of Land Act 1962; contract default, interest and rescission conditions; Mallett v Jones [1989] VR 122; Cowan v Stanhill Estates Pty Ltd (No 2) [1967] VicRp 73; Simcevski v Dixon (No 2) [2017] VSC 531; Bot v Ristevski [1981] VicRp 13.