In Ontario, a seller's lawyer discovers a title defect one day before the scheduled closing that cannot be resolved immediately. The Agreement of Purchase and Sale contains no specific provision addressing this situation. What is the most appropriate legal remedy?

Q: What is the correct answer to: In Ontario, a seller's lawyer discovers a title defect one day before the scheduled closing that cannot be resolved immediately. The Agreement of Purchase and Sale contains no specific provision addressing this situation. What is the most appropriate legal remedy?

The correct answer is The seller can seek a reasonable adjournment to cure the title defect. Option C is correct because Ontario common law recognizes the seller's right to seek a reasonable adjournment when a title defect prevents delivery of good and marketable title. This principle, established through case law, allows sellers time to cure defects provided they act diligently and in good faith. The remedy balances the seller's contractual obligation to deliver clear title with practical realities that title issues may require time to resolve, preventing automatic contract termination while protecting both parties' legitimate interests.

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

In Ontario real estate transactions, sellers must deliver good and marketable title at closing. Title defects can include liens, encumbrances, easements, or other issues affecting ownership rights. Common law principles govern situations not specifically addressed in purchase agreements. The reasonable adjournment remedy balances contractual obligations with practical realities. Sellers must act diligently to cure defects and cannot indefinitely delay closing. If defects cannot be cured within reasonable time, buyers may then pursue remedies including contract termination or damages. This principle protects both parties while maintaining transaction viability when possible.

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

Remember CURE: C - Can the defect be fixed? U - Unreasonable to force immediate closing, R - Reasonable time to resolve, E - Effort must be diligent. Like a doctor treating a patient, the seller gets reasonable time to 'cure' the title defect before the contract is declared 'terminal.' When you see title defect questions, think CURE. Ask: Can it be fixed? Is immediate closing unreasonable? Does seller need reasonable time? Will seller make diligent effort? If yes to all, adjournment is the remedy.

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

Look for 'title defect' + 'no specific provision' = reasonable adjournment. Eliminate options forcing buyer to accept defective title or automatically voiding contracts. Focus on remedies that give sellers opportunity to cure defects.

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

A seller discovers an unregistered lien from previous renovations one day before closing. The contractor confirms the debt was paid but paperwork was never filed to discharge the lien. The seller's lawyer requests a two-week adjournment to obtain proper discharge documents and clear the title. This allows the transaction to proceed once the administrative issue is resolved, protecting both buyer and seller interests while maintaining the deal.

Question

Contracts & AgreementsAgreement Of Purchase And SaleONHARD

In Ontario, a seller's lawyer discovers a title defect one day before the scheduled closing that cannot be resolved immediately. The Agreement of Purchase and Sale contains no specific provision addressing this situation. What is the most appropriate legal remedy?

Answer Options

A

The buyer must close and accept the defective title

B

The contract is automatically frustrated and becomes void

C

The seller can seek a reasonable adjournment to cure the title defect

D

The buyer can claim immediate damages for breach of contract