A buyer submits an offer on an Alberta property with a condition for financing approval within 5 business days. On the 4th day, the buyer decides they no longer want the property but have received financing approval. Can the buyer use the financing condition to exit the contract?
Correct Answer
B) No, conditions must be exercised in good faith, and financing was approved
In Alberta, conditions in purchase contracts must be exercised in good faith. The implied duty of good faith means a buyer cannot use a condition as an escape clause when the condition has actually been satisfied. If financing was approved, the buyer is expected to waive the condition.
Why This Is the Correct Answer
Alberta contract law imposes an implied duty of good faith in exercising conditions. If a financing condition has been satisfied (approval received), the buyer cannot pretend it was not satisfied to exit the contract for unrelated reasons. Using a satisfied condition as a false pretext to terminate violates the duty of good faith.
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