Buyer wants to cancel contract..can they?

Neither of those scenarios would be enough to give rise to an estoppel. This situation probably lacks the element of inducement that gives rise to unconscionability, e.g. it'd be different if the vendor induced the buyer to believe they'd be released from the subject contract, in order for the vendor to sell them the second cheaper property, and then tried to sue for default on the first contract.

It really is hugely unlikely Mamaof3 went anywhere near creating an estoppel, I'm just making the point that you have to be careful in what you say.

A good summary of the principles of estoppel can be found here: http://www.australiancontractlaw.com/cases/walton.html
Once the vendor's verbally accepted the buyer's request to terminate by mutual agreement, it's a done deal - they can't change their mind in writing later. The contract discharges at that moment. Written contracts can only be varied in writing, but can be terminated orally. < Edit: this is at common law; there may be statutory requirements that termination is in writing, I'm unsure. In any case, it's obviously good practice to have it in writing.
Getting back to the OP's issue - is it really subject to valuation or is it an unconditional contract? Sounds more like the buyer's finance is conditional (the condition that the buyer achieved finance is satisfied) however valuation finance prior to completion is not a factor in determining whether or not the contract of sale is unconditional.

The principle of estoppel as demonstrated in Walton v Maher won't come into it as the contract has been agreed and signed by both parties (unlike Walton who had not signed, time was not of the essence and neither party was under the impression that the other wouldn't proceed until shortly prior to completion of the building - a similarity with Walton v Maher but not critical).
 
Getting back to the OP's issue - is it really subject to valuation or is it an unconditional contract? Sounds more like the buyer's finance is conditional (the condition that the buyer achieved finance is satisfied) however valuation finance prior to completion is not a factor in determining whether or not the contract of sale is unconditional.
My reading of this situation is that the contract was conditional, but the condition having been previously satisfied when they got an approval, is now unconditional. The condition isn't re-enlivened if his finance falls through after the condition has been satisfied.
Scott No Mates said:
The principle of estoppel as demonstrated in Walton v Maher won't come into it as the contract has been agreed and signed by both parties (unlike Walton who had not signed, time was not of the essence and neither party was under the impression that the other wouldn't proceed until shortly prior to completion of the building - a similarity with Walton v Maher but not critical).
That seems like a very narrow reading of Walton Stores v Maher; it wasn't just about a signed agreement vs a not signed agreement, it is authority for the much broader doctrine of equitable estoppel.

In any case, even if it were so narrowly construed, the verbal agreement to vary - i.e. We'll release you if you can provide proof of job termination - is likely to be viewed as the termination of the first contract and creation of a new contract (per Tallerman), and we're back to the position that there's been an agreement to substitute a new contract with that condition in it, that hasn't been signed, and Walton Stores v Maher thus becomes applicable again.
 
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