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?
Correct Answer
B) The contract is void due to the expired condition
When a condition precedent expires without being fulfilled or waived before the deadline, the contract becomes void. The buyer cannot fulfill or waive the condition after the specified time has passed, regardless of subsequent developments.
Why This Is the Correct Answer
Option B is correct because condition precedent deadlines are strictly enforced in Canadian real estate law. When a financing condition expires at 5:00 PM on March 15th without being fulfilled or waived, the contract automatically becomes void. The subsequent mortgage approval on March 16th is legally irrelevant because the condition had already expired. This principle ensures contractual certainty and prevents parties from being bound indefinitely by unfulfilled conditions. Provincial real estate legislation across Canada supports this strict interpretation of condition deadlines.
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Previous Question
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?
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A buyer's offer contains a financing condition that expires on Friday at 6:00 PM. On Thursday, the buyer's mortgage application is denied and no other lender will approve the loan. What is the buyer's best course of action?