Inspection Clause and Contract Termination


If a home inspection report reveals defects about the property can the buyer simply decide not to proceed?


The law on this point was changed a few years ago by the Supreme Court of Canada.

If Bob was the Buyer, you simply went to Bob and asked him “is the condition satisfactory to you”? That was a subjective test.

Now, the test question is: “would a reasonable person in Bob’s position find the condition to be satisfactory”? That’s an objective test and it makes a great deal of difference.

See: Bhasin v. Hrynew SCC 13 November 2014

The Supreme Court of Canada created a new common law doctrine. It was the biggest change to contract law in over 100 years, so, if you are in the real estate business, you better know all about it.

Brian Madigan LL.B., Broker

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