Contracts: Formation, Conditions and Misrepresentation
Contract questions test whether you can tell a binding deal from a conversation, and whether you can spot the clause that decides who carries a risk. Saskatchewan practice puts every agreement in writing, and a purely verbal deal for land is both unenforceable in practice and an evidentiary nightmare.
Formation
Offer, acceptance, consideration, capacity, legality and certainty of essential terms. A counter-offer is a new offer that kills the original, so a purported acceptance of the counter on different terms is itself a counter-offer. Acceptance must be communicated in the manner and by the deadline the offer requires. The deposit is consideration and evidence of good faith, not a penalty.
Conditions, representations and warranties
- A condition precedent must be satisfied or waived in writing before the deal becomes unconditional; a condition subsequent unwinds a deal if something happens later.
- A representation is a statement that induced the contract; a warranty is a contractual promise. Remedies differ.
- Misrepresentation may be fraudulent, negligent or innocent, with rescission and damages as the usual remedies. An entire agreement clause limits reliance on outside statements but does not protect fraud or a registrant’s misleading conduct.
- Saskatchewan’s Homesteads Act, 1989 requires a non-owning spouse’s consent to a disposition of a homestead, so title and spousal status are contract issues, not just conveyancing details.
Worked example
A buyer’s offer reads “subject to the buyer obtaining financing on terms acceptable to the buyer, by March 1”. By March 2 the buyer has not applied and wants the deposit back. The clause is a condition precedent that requires reasonable efforts; a buyer who does nothing has not satisfied it and cannot shelter behind it. The seller may treat the deal as at an end and dispute the deposit.
Traps
- Confusing the completion date, when money and title move, with the possession date.
- Assuming an unsigned amendment changes anything.
- Believing a condition can be waived verbally.
- Thinking an entire agreement clause excuses a false statement by a registrant.
- Missing that an electronic signature can bind a party.