“Survive and not Merge” Wording in Ontario

Question:

The warranty clause, in order to survive closing, would have to include an appropriate wording; e.g., This warranty shall survive and not merge on completion of the transaction but apply only to the state of the property at completion of the transaction.

If the closing date is Dec.1, this warranty will survive until Dec. 1. After Dec.1, this warranty disappears. Is it right?

If the above is correct, it is same meaning as “Merge on completion”?

Answer:

The preferred wording and best practice is to use “survive and not merge”.

Then, that will indicate the intention for that particular term of the contract to survive.

However, if you don’t use those words then the clause may still survive, if the Court determines that that was the intention of the parties,

So, if the agreement is that the Seller will open the pool in the Spring and the deal closes at the end of January, then the Court may conclude that the parties intended this term to survive, and be prepared to enforce it in May.

If you are drafting something up, use the preferred wording.

But, if the wording is not there, just don’t assume that it “merged”. Maybe, it didn’t.

Brian Madigan LL.B, Broker

www.OntarioRealEstateSource.com

Comments 3

  1. Question asked “… If the closing date is Dec.1, this warranty will survive until Dec. 1. After Dec.1, this warranty disappears. Is it right?

    If the above is correct, it is same meaning as “Merge on completion”?”

    Answer might have included. No, the Seller’s liability continues after closing (survives, does not merge) BUT 1) only on this point and 2) only based on the condition of the property as it was on the Dec 1 date specified as closing in your question.

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