Humber/Ontario Real Estate Course 3 Exam Practice

What does the introductory clause allowing the buyer to terminate an agreement by written notice imply in an offer?

1. The clause is a preceding condition.

2. The clause must have a waiver provision.

3. The clause is a following condition.

4. The clause can solely be used in mortgage conditions.

5. The clause binds the seller unconditionally.

6. The clause needs an attorney's approval to be binding.

The correct answer is: The clause is a following condition.

The introductory clause allowing the buyer to terminate an agreement by written notice is correctly identified as a following condition. This type of clause indicates that the buyer has the right to end the contract if certain conditions are not met or if they choose to exercise this option within a specified timeframe. It establishes that the termination of the agreement can occur after the contract has been executed, depending on the circumstances outlined in the clause. This mechanism ensures flexibility for the buyer, allowing them to reassess their commitment after the initial agreement. It reflects the understanding that there may be further developments or conditions that could influence the buyer's decision. A clause of this nature is essential in real estate transactions, as it protects the buyer’s interests, acknowledging that circumstances may change post-agreement.