This paper discusses the sequence of events that result in formation of out-of-plane deformation and subsequent instability in rectangular walls under in-plane loading. The experimental observations of a wall specimen that failed in pure out-of-plane instability are used for this purpose. The wall was designed according to the New Zealand concrete design standard and the potential changes to the wall design section of this standard to prevent this mode of failure are discussed in detail in light of the experimental observations and analytical predictions.