Under what circumstances can a buyer legally terminate an Agreement of Purchase and Sale without penalty after all conditions have been waived or fulfilled?
Correct Answer
C) If there is a material breach of contract by the seller
Once all conditions are satisfied or waived, the contract becomes firm and binding. A buyer can only legally terminate without penalty if the seller commits a material breach of contract, such as failing to provide clear title or deliver the property as agreed.
Why This Is the Correct Answer
Option C is correct because material breach of contract is a fundamental legal principle that allows the innocent party to terminate without penalty. Under Canadian contract law and real estate regulations, if a seller fails to meet essential contractual obligations (such as providing clear title, delivering possession, or meeting disclosure requirements), this constitutes material breach. The buyer can then legally terminate the agreement and potentially seek damages, as the seller's failure to perform goes to the root of the contract.
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