Offer Withdrawal

No seal, no deal - Canadian Construction Association

How much flexibility does a buyer have in regards to withdrawing an Offer/counter Offer before it being accepted by the seller? This assumes that OREA Form 100 is used and signed under seal. 

Answer:

While it is indeed proposed that the Offer be irrevocable, the only “obligation” that arises is if the Offer (or counter Offer) were executed under seal. The reason is that there is no consideration flowing for the promise of irrevocability. So, instead of an enforceable promise, it is merely a gratuitous offering which might be withdrawn before acceptance. Hence, the seal is the solution. That makes the Offer irrevocable right up to the time limit.

The next issue in this process is “delivery”. If a party signs an Offer, even under seal, as long as it remains with that party or their Agent, then it may be revoked. This is also the case where the Agent has phoned and said “I’m bringing you an Offer”. That party can still call their own Agent while enroute and say “I’ve had second thoughts, do not proceed”.

Once delivery has taken place, the Offer may not be withdrawn. Delivery means that the Offer has been transferred into the possession of the other side. So, the Offeree has it personally or their Agent has it on their behalf. The Offer could be received by fax, e-mail, or hard copy, but it’s now in the possession of the Offeree.

Sometimes, the Offeror truly wants to be able to “pull their Offer” as a negotiating item. In that case, the standard Form Agreement needs to be amended and the seal removed. That’s difficult because it is printed into the Form. It could be crossed out with an “X”, initialed, with the words “not under seal” added, and with the addition of the statement in Schedule A, “this Agreement is not executed under seal”. That procedure should be sufficient for removal of the seal.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

Comments 4

  1. Post
    Author

    It’s enforceable in Third Party transactions, like the Agreement of Purchase and Sale.

    However, in a two party agreement, where one party has a duty to explain to the other, it may not be enforceable.

    As for the first, there is still an opportunity for the Client to sue the Agent, although they are stuck with the deal.

  2. What if the person making the offer is a Customer and wants to withdraw the offer before it has been delivered to the Seller. The Customer is working with the Listing Agent and the Customer want to withdraw offer prior to time posted for presentations and offers and has not been sent to the Seller, however verbally communicated to the Seller?

    1. Post
      Author

      Only in the most sophisticated of situations would the Agent be able to argue all the “customer” business.

      It sounds too crazy to be true. And, it is. However, I do appreciate that you were taught that it was OK.

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