Merger of Contract Provisions

Although it is the general rule that the acceptance of a deed is prima facie full execution of the agreement to convey, and preliminary agreements and understandings relating to the sale of land become merged in the conveyance, such a rule is not applicable to independent covenants or collateral stipulations in an agreement of sale not intended by the parties to be incorporated in the conveyance. Delivery and acceptance of the conveyance in such circumstances is merely a part performance of the obligations of the vendor under the contract.

The general rule is that the acceptance of a deed is prima facie full execution of the agreement to convey, and preliminary agreements and understandings relating to the sale of land become merged in the conveyance

This rule is not applicable to independent covenants or collateral stipulations in an agreement of sale not intended by the parties to be incorporated in the conveyance.

Delivery and acceptance of the conveyance in such circumstances is merely a part performance of the obligations of the seller under the contract.

At a time when this matter was uncertain, many contracts included the “not merge…but shall survive” provision. Now that the matter has been clarified those particular words are no longer necessary, but it is always good practice to add them, because their inclusion is commonplace.

It’s important to know that without their inclusion, Courts must determine the intention of the parties. So, merely crossing those words out, on a signback counter-offer may not have the desired effect.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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