Bob is focusing on purchasing in a certain area. He is a little short of cash. He doesn’t want to participate in a bidding war. He’s not likely to win because he has conditions, but if he does participate, that will just push up the prices in the area, and when the right property finally comes around, it will be more expensive.
Bob’s strategy is simple. He will put in an Offer early, but if it turns into multiples, he would like to withdraw.
Implementing the Strategy
The usual arrangement is that an Offer is irrevocable until a certain time. Yesterday, his Offer was open for acceptance until 10:00 pm, and this prompted another purchaser to come forward. He was still in the running until 10:00 pm. He couldn’t withdraw. Bob needs an exit plan, and his first step would be to remove the “seal” from the Offer. It was the seal that made the Offer irrevocable. Without the seal, the ordinary rules of contract would prevail and he could withdraw the Offer anytime prior to acceptance.
Remove the Seal
So, the first step is to remove the seals from the Offer. That’s easier said than done since the seal is now a black dot on the page. Previously, when a red wafer was affixed, that step could simply be eliminated.
The seal could be:
- Whited out,
- Crossed out,
- Coloured out, or
- Written out by adding words like: “not under seal”, “no seal”.
This might be easy enough with a hard copy, but somewhat more challenging when it comes to various software programs.
Add Provision to Schedule “A”
Bob would be wise to also add a clause that says:
“The parties agree that the legal seals have been removed, this Offer is not submitted under seal, and this Offer may be revoked at anytime prior to acceptance by notification in writing or notification by email.”
The Trigger for Revocation
The second Offer is really the trigger for the revocations, so, we should probably add a clause to that effect:
“In the event that the Seller receives another Offer which is open for acceptance at any time during the duration of the irrevocable period of this Offer, then, this Offer shall be automatically revoked and no longer capable of acceptance by the Seller’
Consequence, no multiples
When Bill submits his Offer as a competing bidder, then Bob’s Offer is automatically revoked and is no longer capable of acceptance. When we are talking about the “count”, in this case, there was one Offer from Bob, then when Bill’s Offer was received, Bob’s Offer was automatically revoked, so the “count” remains at one (1).
For anyone else inquiring, there’s only one Offer.
Bob may have accomplished what he set out to do on this property. Hopefully, the next house in the area will be his.
Brian Madigan LL.B., Broker