Merger Survivorship Wording

(Ontario)

Consider the following clause:

“The Seller represents and warrants to the best of his knowledge and belief that the swimming pool and equipment are now, and on the completion shall be, in good working order. The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to the state of the property existing at completion of this transaction.”

Comment

The merger provision and the warranty provision are two distinct things.

The Supreme Court of Canada has already decided that a warranty continues after the closing if that was the intention of the parties.

One very good way to ensure that it would continue afterwards would be to say “shall not merge, but shall survive”. It’s important is realize that these are simply helpful words to eliminate uncertainty. They confirm the intention.

However, if the intention is there anyways, then the Warranty survives, even without those particulars words.

So, best to use the “magic words” but even if they are not there, we may still have a warranty which is enforceable after closing.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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