Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

October 7th - 2006

Time is of the Essence

The sellers were approached by Loblaws to buy about 12 acres of a 56 acre parcel for $1.8 million based on a price of $150,000 per acre.

The sellers were approached by Loblaws to buy about 12 acres of a 56 acre parcel for $1.8 million based on a price of $150,000 per acre. The offer was prepared by Loblaws and provided for a $75,000 deposit to be made within five days. The offer also had a time of the essence clause.

When the deposit was (through Loblaws' inadvertence) not paid until seven days later than stipulated in the agreement, the sellers treated the agreement as discharged and proceeded to negotiate and execute a second agreement with another buyer for the entire parcel at $125,000 per acre. Loblaws sued for specific performance– and lost. The judge said:

"When Loblaws, albeit through inadvertence, failed to pay the deposit cheque within the time specified, it breached a term which the parties had agreed was essential to the contract. That made it a fundamental breach entitling the vendors to treat the contract as discharged and releasing them from their obligations under it. They did nothing to injure Loblaws or lead it to act against its interests by not asserting their right on the first day of default, and did nothing which in law or fact could fairly be construed as having waived or extended the time provision.”

1473587 Ontario Inc. v. Jackson, 2005 CanLII 4578 (ON S.C.)

Mev's Comments
There was no fault, guile, deception or subterfuge on the part of the sellers. They did not use their position unfairly or play fast and loose with Loblaws. Loblaws was told that its cheque would not be accepted the same day two of the sellers first met with the second buyer. Loblaws' late cheque was actually sent back to them several days before the other buyer and the sellers executed the second agreement.

In cases like this, where the cheque is late or dishonoured, the REALTOR® should not give legal advice to their clients. Instead, tell them to contact their lawyer so that appropriate legal decisions can be made.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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