In an Alberta transaction, a buyer's offer is conditional on a satisfactory home inspection. The inspection reveals minor cosmetic issues. Can the buyer terminate the contract based on the inspection condition?

Q: What is the correct answer to: In an Alberta transaction, a buyer's offer is conditional on a satisfactory home inspection. The inspection reveals minor cosmetic issues. Can the buyer terminate the contract based on the inspection condition?

The correct answer is Yes, the buyer has absolute discretion to not waive an inspection condition regardless of the findings. When an AREA purchase contract inspection condition includes 'sole discretion' language, the buyer has absolute authority to determine satisfaction. The buyer can decline to waive the condition for any reason, including minor cosmetic issues or even personal preference. The specific wording of the condition controls the buyer's rights under Alberta contract law.

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

Alberta courts distinguish between objective and subjective conditions. A 'sole discretion' or 'sole satisfaction' condition gives the party broad subjective rights. Without such language, a condition may require objective reasonableness. AREA contract wording is therefore critical to understanding each party's rights.

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

When you see 'sole discretion,' think 'sole = SOUL decision.' The buyer's soul (personal judgment) decides, no matter how minor the issue. On the exam, look for 'sole discretion' or 'sole satisfaction' wording. If present, the buyer has absolute authority over the condition regardless of findings.

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

Always check the exact wording of the condition. 'Sole discretion' gives absolute control to the buyer. Without it, a reasonableness standard may apply.

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

A buyer's inspection reveals only minor paint chips and a squeaky door. Because their condition states 'satisfactory in the buyer's sole discretion,' the buyer decides not to waive the condition and exits the contract. The seller cannot challenge this decision despite the minor nature of the issues.

Question

Contracts & AgreementsABMEDIUM

In an Alberta transaction, a buyer's offer is conditional on a satisfactory home inspection. The inspection reveals minor cosmetic issues. Can the buyer terminate the contract based on the inspection condition?

Answer Options

A

Yes, the buyer has absolute discretion to not waive an inspection condition regardless of the findings

B

No, the inspection condition can only be used if major structural defects are found

C

Yes, but only if the buyer provides the inspection report to the seller

D

No, cosmetic issues are never grounds for condition non-waiver