In an Agreement of Purchase and Sale, what happens when a buyer fails to satisfy a financing condition by the specified deadline?
Correct Answer
A) The agreement becomes null and void
When a condition is not satisfied or waived by the specified deadline, the agreement becomes null and void. This protects the buyer from being forced into a purchase when they cannot secure financing, and allows both parties to walk away without penalty.
Why This Is the Correct Answer
Option A is correct because under Canadian real estate law, when a condition in an Agreement of Purchase and Sale is not satisfied or waived by the specified deadline, the agreement automatically becomes null and void. This is a fundamental principle across all provinces - the contract simply ceases to exist, releasing both parties from their obligations. No further action, notice, or legal proceedings are required. This automatic nullification protects buyers from being forced into purchases they cannot complete and allows sellers to immediately pursue other opportunities.
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