What's the difference between a conditional and unconditional contract?

Common conditions in residential contracts: 'subject to finance' (buyer can rescind if formal loan approval isn't obtained by date X), 'subject to building + pest' (rescission if report identifies defects above specified $ threshold), 'subject to sale of existing property', 'subject to satisfactory legal review'. Each condition has a deadline (typically 14-21 days post-exchange).

Unconditional means no conditions, every condition has been satisfied or waived. Typically reached after the cooling-off period ends, finance is fully approved, building + pest is accepted, etc. Auctions: in most states, auction contracts are unconditional from the fall of the hammer (no cooling-off, no subject-to clauses unless negotiated pre-auction).

Risk profiles: a conditional offer gives you outs but is weaker, a vendor with multiple offers will often prefer a slightly lower unconditional offer. An unconditional offer signals serious money but commits you fully. Many buyers use 'short-form' conditions (e.g. 5-day finance) to thread the needle: enough to win the contract competition, short enough to enforce due diligence quickly.

If a condition fails: the contract typically auto-terminates + your deposit is refunded. But you must give written notice within the deadline. Miss the deadline + the contract becomes unconditional even if the condition wasn't met. Always have your solicitor / conveyancer track condition deadlines + draft the rescission letter if needed.