A buyer submits an offer with a financing condition that expires at 11:59 PM on Friday. The buyer's mortgage application is approved at 10:30 AM on Saturday. What is the legal status of the offer?

Q: What is the correct answer to: A buyer submits an offer with a financing condition that expires at 11:59 PM on Friday. The buyer's mortgage application is approved at 10:30 AM on Saturday. What is the legal status of the offer?

The correct answer is The offer is null and void because the condition was not satisfied before the deadline. Option B is correct because conditions in real estate contracts must be satisfied or waived before their specified deadline. Under Canadian contract law and provincial real estate legislation, once a condition expires without being satisfied, the entire offer becomes null and void automatically. The timing requirement is absolute - the financing condition expired at 11:59 PM Friday, but approval came Saturday morning, making it too late. This principle ensures certainty and finality in real estate transactions.

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

Conditional offers contain clauses that must be satisfied within specified timeframes for the contract to remain valid. Common conditions include financing, inspection, and sale of buyer's property. Under provincial real estate legislation like TRESA (Ontario) and RESA (Alberta), these conditions create binding obligations with strict deadlines. The 'time is of the essence' principle means that specified times are material terms of the contract. If conditions are not satisfied or waived by the deadline, the offer automatically becomes null and void, protecting both parties from indefinite uncertainty.

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

Like Cinderella's carriage turning back into a pumpkin at midnight, real estate conditions expire exactly at their specified time - no exceptions, no extensions, no fairy godmother to save the day. When you see timing questions about conditions, remember Cinderella - once the clock strikes the deadline time, the magic (valid offer) disappears completely, regardless of what happens afterward.

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

Look for the exact deadline time and compare it to when the condition was actually satisfied. If satisfaction occurs even one minute after the deadline, the offer is null and void - no exceptions.

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

A buyer submits an offer on a $500,000 home with a financing condition expiring Friday at 5 PM. Their mortgage broker calls with approval at 5:15 PM the same day. Despite being only 15 minutes late and the seller being willing to proceed, the offer is legally null and void. The buyer must submit a new offer if they still want the property, and the seller is free to accept other offers that may have come in over the weekend.

Question

Contracts & AgreementsConditionsMEDIUM

A buyer submits an offer with a financing condition that expires at 11:59 PM on Friday. The buyer's mortgage application is approved at 10:30 AM on Saturday. What is the legal status of the offer?

Answer Options

A

The offer remains valid since financing was ultimately approved

B

The offer is null and void because the condition was not satisfied before the deadline

C

The seller can choose whether to accept the late satisfaction of the condition

D

The condition is automatically extended to the next business day