Question:
The following condition does/does not require a notice of fulfillment. If seller does nothing, it becomes firm and binding after the date of due diligence passes. What if the agent does a Notice of Fulfillment anyways?
“This Agreement of Purchase and Sale is conditional until 9:00 p.m. on the 14th day of December 2022, (“Due Diligence Date”) to permit the Buyer to investigate, make inquiries, attend at the property and conduct such tests as may be necessary, conduct market feasibility studies, determine the appropriate and suitability for development of the property, receive information from Municipal, County and Conservation authorities and evaluate costs thereof, in relation to developing the subject property.
If the Buyer is not fully and completely satisfied, in his sole and absolute discretion (to be determined upon a subjective basis only) then, the Buyer may terminate this Agreement of Purchase and Sale by giving written notice to the Seller at any time before 9:00 pm on the Due Diligence Date.
Upon receipt of this notice of termination, the agreement of purchase and sale shall become null and void and the deposit together with any accrued interest thereon, without deduction shall be paid to the Buyer.
This Condition is included for the benefit of the Buyer and may be waived by the Buyer, by notice in writing delivered to the Seller or the Seller’s agent at any time prior to 9:00 p.m. on the Due Diligence Date.”
Answer:
This Clause was written as a Condition Subsequent meaning that no paperwork would be necessary. However, there is a reference to a Waiver. That would speed things up, if it were to be signed prior to 14 December.
A problem arises if an NOF were to be used instead. There was no reference to an NOF in the clause itself. So, if it is used; what does it mean? Actually, the NOF Form does not make any reference to waiving the condition. Yes, it may be fulfilled, but what is the result? The activities were undertaken, but it doesn’t mean that the Buyer is satisfied. If that were the case, the condition remains until expiry on the 14th, at which time, if the Seller has heard nothing, the agreement has become unconditional.
Brian Madigan LL.B., Broker