Solicitor’s Approval Clause

At a recent Course on Writing clauses, we talked about setting up the Solicitor’s Review and Approval Clause as a Condition Subsequent rather than a Condition Precedent.

This was not one of the 25 clauses under review.

Here’s what a Condition Subsequent looks like for a Mortgage:

  • The Buyer may terminate this Agreement through written notice delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than ____ p.m. on the _____ day of , 2022 , if a new first Charge/Mortgage satisfactory to the Buyer, in the Buyer’s sole, absolute and unfettered discretion cannot be arranged by the Buyer, at the Buyer’s expense.
  • Upon receipt of the above notice, this Agreement shall be null and void and the deposit shall be returned to the Buyer in full without deduction. If no such notice is received within the above time limit, then this term of contract shall be deemed waived by the Buyer and this Agreement shall remain valid and binding whether or not such Charge/Mortgage has been arranged.

Basically, if nothing happens, the deal will proceed. It’s only with “paperwork” that it will be stopped. That can be risky, because it could happen through oversight or by accident.

However, it may be helpful when it comes to the Solicitor’s review and approval. You already know what your clauses say in the Agreement and you might have worked with this lawyer before. In fact, they might have supplied you with some of the clauses.

This is what the same Condition Subsequent Clause would look like if it were for Lawyer’s Approval:

The Buyer may terminate this Agreement through written notice delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than ____ p.m. on the _____ day of_______, 2022, if this Agreement is not satisfactory to the Buyer’s solicitor, in their sole, absolute and unfettered discretion. Upon receipt of the above notice, this Agreement shall be null and void and the deposit shall be returned to the Buyer in full without deduction. If no such noticeis received within the above time limit, then this term of contract shall be deemed waived by the Buyer and this Agreement shall remain valid and bindingwhether or not such Agreement has be reviewed and approved by the Buyer’s solicitor.

Solicitor’s Review and Business Terms

There is an issue as to whether or not this review applies to “business terms” as well as legal terms. In New Zealand, the answer is legal terms only. In Alberta, the answer is that business terms also apply. There are no Ontario cases, so the issue is uncertain here. Let’s make it certain and add business terms:

The Buyer may terminate this Agreement through written notice delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than ____ p.m. on the _____ day of________, 2022, if this Agreement is not satisfactory to the Buyer’s solicitor, in their sole, absolute and unfettered discretion considering both legal and business terms. Upon receipt of the above notice, this Agreement shall be null and void and the deposit shall be returned to the Buyer in full without deduction. If no such notice is received within the above time limit, then this term of contract shall be deemed waived by the Buyer and this Agreement shall remain valid and binding whether or not such Agreement has be reviewed and approved by the Buyer’s solicitor.

Let’s shorten it up

This time, we want to say the same thing, but just get rid of the unnecessary words:

The Buyer may terminate this Agreement through written notice delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than ____ p.m. on the _____ day of________, 2022, if this Agreement is not satisfactory to the Buyer’s solicitor, in their sole, absolute and unfettered discretion considering both legal and business terms. Upon receipt of the above notice, this Agreement shall be null and void and the deposit shall be returned to the Buyer in full without deduction. If no such notice is received within the above time limit, then this term of contract shall be deemed waived by the Buyer and this Agreement shall remain valid and binding whether or not such Agreement has be reviewed and approved by the Buyer’s solicitor.

In essence, the words “underlined above” are really not required. This is the shortened clause:

The Buyer may terminate this Agreement through written notice delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale not later than ____ p.m. on the _____ day of________, 2022, if this Agreement is not satisfactory to the Buyer’s solicitor, in their sole, absolute and unfettered discretion considering both legal and business terms. Upon receipt of the above notice, this Agreement shall be null and void and the deposit shall be returned to the Buyer in full without deduction.

And one more time:

The Buyer may terminate this Agreement through written notice delivered to the Seller not later than ____ p.m. on the _____ day of________, 2022, if this Agreement is not satisfactory to the Buyer’s solicitor, in their sole, absolute and unfettered discretion considering both legal and business terms. Upon receipt of the above notice, this Agreement shall be null and void and the deposit shall be returned to the Buyer in full without deduction.

The last three clauses all have the same meaning.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

Leave a Reply

Your email address will not be published.