Contracts, agreements and transaction documents
This domain tests contract formation, the standard Agreement of Purchase and Sale, conditions, deadlines and completion mechanics. Questions target what makes a binding offer, how conditions are waived or fulfilled, time-is-of-the-essence consequences, and what documents belong in a complete file.
Formation
An Agreement of Purchase and Sale needs the parties, the property, price, deposit, chattels and fixtures, completion and requisition dates, and any conditions. OREA Form 100 is the resale form; Form 101 is the condominium resale version. The Statute of Frauds requires land contracts to be in writing, and electronic signatures are valid under the Electronic Commerce Act, 2000. An offer is irrevocable until the stated time; a counter-offer cancels the original.
Conditions and time
Conditions are true conditions precedent - financing, inspection, status certificate review, sale of the buyer's home. A condition is satisfied by a signed Waiver; a Notice of Fulfillment confirms compliance where the condition is a diligence obligation rather than a true condition. Time is of the essence: dates are deadlines, and tender of closing documents must be timely. The requisition date is the buyer's deadline to object to title, after which the buyer accepts title subject to the stated objections.
Completion mechanics
On completion the buyer pays the balance, adjustments run to the completion date, and the transfer is registered. Amendments must be in writing and signed by both parties to be enforceable. New homes add Tarion warranty coverage and HST implications; condominium resales add the status certificate condition.
Worked example
An offer conditional on financing for five business days is accepted Monday. The lender declines on day four. The buyer can waive and proceed at risk, or let the deadline pass without a waiver, which ends the agreement and returns the deposit. Either way the salesperson must not let the deadline slide silently - an expired condition still ends the deal.
Traps
- Describing a conditional deal as firm in advertising or conversation.
- Agreeing to terms by email without a signed amendment.
- Assuming a condition expiring works in the client's favour.
- Ignoring the difference between waiving a condition and fulfilling it.