A buyer includes a home inspection condition in their offer that states 'subject to buyer's approval of a home inspection.' What type of condition is this considered to be?

Q: What is the correct answer to: A buyer includes a home inspection condition in their offer that states 'subject to buyer's approval of a home inspection.' What type of condition is this considered to be?

The correct answer is A subjective condition that depends on the buyer's personal satisfaction. Option B is correct because the phrase 'subject to buyer's approval' creates a subjective condition that depends entirely on the buyer's personal satisfaction and discretion. Under Canadian contract law and provincial real estate legislation, subjective conditions are valid when they grant the buyer the right to determine satisfaction based on their own judgment. The buyer has the authority to approve or disapprove the inspection results according to their personal standards, though they must still act in good faith and not be arbitrary or capricious in their decision-making process.

Q: What background knowledge is needed for this Contracts & Agreements question?

Conditions precedent in real estate contracts protect buyers by allowing them to withdraw without penalty if certain requirements aren't met. Canadian provincial legislation like TRESA (Ontario) and RESA (Alberta) recognize both subjective and objective conditions. Subjective conditions depend on the buyer's personal satisfaction and discretion, while objective conditions require specific, measurable criteria. Courts require good faith performance of subjective conditions, meaning buyers cannot act arbitrarily or capriciously. The distinction affects how conditions are interpreted, performed, and potentially disputed, making proper drafting essential for enforceability.

Q: What is a good way to remember the answer to this Contracts & Agreements question?

Remember SOAP: Subjective = Opinion Approval Personal. When you see words like 'approval,' 'satisfaction,' or 'discretion' of the buyer, think of washing with soap - it's all about personal preference and how clean YOU feel it is. Objective conditions are like measuring soap - specific amounts and criteria must be met. When you see condition wording on the exam, ask: 'Is this about the buyer's personal opinion (SOAP = subjective) or specific measurable criteria (objective)?' Words like 'approval,' 'satisfaction,' and 'discretion' signal subjective conditions.

Q: What exam tip applies to this Contracts & Agreements question?

Look for key words in condition clauses: 'approval,' 'satisfaction,' or 'discretion' indicate subjective conditions. Specific criteria, measurements, or required findings indicate objective conditions. The buyer's personal judgment versus measurable standards is the key distinction.

Q: How does this Contracts & Agreements concept apply in real world practice?

A buyer includes a home inspection condition stating 'subject to buyer's approval of home inspection.' After the inspection reveals minor cosmetic issues but no major defects, the buyer decides they're not comfortable with the property's condition and exercises their right to disapprove. Since this is a subjective condition, the buyer can withdraw based on their personal satisfaction level, even though the issues might not concern other buyers. The seller cannot challenge this decision as long as the buyer acted in good faith.

Question

Contracts & AgreementsConditionsMEDIUM

A buyer includes a home inspection condition in their offer that states 'subject to buyer's approval of a home inspection.' What type of condition is this considered to be?

Answer Options

A

An objective condition that requires specific defects to be found

B

A subjective condition that depends on the buyer's personal satisfaction

C

An invalid condition because it's too vague

D

A condition that automatically expires after 5 business days