Humber/Ontario Real Estate Course 3 Exam Practice

What does an irrevocable date in a purchase and sale agreement signed on May 10th mean if set for May 11th?

1. Invalid without a 48-hour minimum period.

2. The buyer must adhere to the date if signed under seal.

3. The buyer can revoke the offer anytime.

4. The contract expires at noon on May 11th.

5. Either party can extend the date by mutual agreement.

6. The timeline is automatically extended to the next business day.

The correct answer is: The buyer must adhere to the date if signed under seal.

In a purchase and sale agreement, an irrevocable date is a critical component that defines the duration for which an offer remains valid and binding. When an irrevocable date is set for May 11th, this signifies that the terms of the offer must be accepted or rejected by that date. If the buyer signs the offer under seal, it strengthens the binding nature of the agreement, which is crucial for ensuring that the seller can rely on the commitment made by the buyer. By establishing that the buyer must adhere to the date, it emphasizes the commitment expected from them. This means that the buyer is bound to the offer until the irrevocable date expires. If the buyer does not formally withdraw the offer by the end of the irrevocable date, the seller can accept the offer, resulting in a binding contract. The other options reflect misunderstandings of how irrevocable dates function in real estate contracts. While options may present legal nuances or possibilities for extensions, they do not accurately capture the essence of an irrevocable date established under these circumstances.