A buyer submits an offer with a financing condition that expires at 5:00 PM on Friday. The buyer's lender approves the mortgage at 6:00 PM the same day, but the buyer doesn't waive the condition until Monday morning. What is the legal status of the Agreement of Purchase and Sale?
Correct Answer
D) The agreement is void because the condition was not waived before expiry
When a condition expires without being waived or fulfilled, the agreement becomes null and void automatically. The fact that the buyer obtained financing approval does not automatically waive the condition - it must be formally waived in writing before the deadline expires.
Why This Is the Correct Answer
Option D is correct because under Canadian real estate law, when a condition expires without being formally waived in writing before the deadline, the agreement automatically becomes null and void. The fact that the buyer obtained mortgage approval at 6:00 PM does not satisfy the condition that expired at 5:00 PM. Provincial legislation requires conditions to be waived in writing within the specified timeframe. The buyer's failure to waive the condition before the Friday 5:00 PM deadline renders the entire agreement void, regardless of whether the underlying requirement (financing) was actually met.
Why the Other Options Are Wrong
Deep Analysis of This Contracts & Agreements Question
Background Knowledge for Contracts & Agreements
Memory Technique
Exam Tip for Contracts & Agreements
Real World Application in Contracts & Agreements
Common Mistakes to Avoid on Contracts & Agreements Questions
Key Terms
More Contracts & Agreements Questions
What is the primary purpose of an Agreement of Purchase and Sale (APS) in a real estate transaction?
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?
In Ontario, what is the significance of the 'irrevocable' period in an Agreement of Purchase and Sale?
Under what circumstances can a buyer waive a home inspection condition after discovering significant defects during the inspection?
Which of the following is NOT typically considered a standard condition in an Agreement of Purchase and Sale?
- → Which of the following is NOT typically considered an essential element for a valid contract under Canadian common law?
- → A buyer in BC wants to assign their pre-sale contract for a new development condo to a third party. Which statement is correct?
- → A commercial property purchase agreement includes a condition for environmental site assessment. The buyer's environmental consultant discovers soil contamination but the buyer decides to proceed anyway. To complete the purchase, the buyer must:
- → A buyer submits an offer with a financing condition that must be satisfied within 5 business days. On day 4, the buyer's mortgage application is approved but they want better terms. What can the buyer legally do?
- → In an exclusive listing agreement, what obligation does the seller have if they find a buyer themselves during the listing period?
- → Under the doctrine of 'time is of the essence' in real estate contracts, what is the legal significance when a party fails to meet a specified deadline?
- → What happens when a buyer waives a condition in an Agreement of Purchase and Sale?
- → Which of the following is a fundamental requirement for a valid contract under Canadian common law?
- → Sarah lists her home with ABC Realty under an exclusive listing agreement that expires on June 30th. On July 15th, she sells the property to a buyer who first viewed the home during an open house hosted by ABC Realty in May. Assuming a standard holdover clause exists, what is the likely outcome?
- → What happens when a condition in an Agreement of Purchase and Sale is not fulfilled by the specified deadline?
People Also Study
Real Property Law
60 questions
Agency & Professional Ethics
60 questions
Mortgage & Real Estate Finance
60 questions
Land Use & Planning
50 questions
Related Study Resources
Helpful Resources
Previous Question
An Ontario buyer's offer includes a financing condition stating that unless the buyer gives the seller written notice by 11:59 p.m. on March 15 that the condition is fulfilled, the offer is null and void and the deposit is returned. The buyer's mortgage is declined on March 14, and the buyer first tells the seller on March 17. What is the status of the agreement?
Next Question
A buyer submits an offer with a financing condition that expires at 5:00 PM on March 15th. The buyer's mortgage is approved on March 16th at 10:00 AM. What is the legal status of the contract?