Using the Financing or Home Inspection Clause as an Out


I act for the Seller, yet the Buyer’s agent thinks that the Financing Condition and the Home inspection condition provide them with a free “walkaway”. Is this true?


The Supreme Court of Canada has just ruled in two additional cases in respect to the Bhasin v. Hrynew principles.

Essentially, the test of “absolute and unfettered discretion” has switched over from a subjective test to an objective test.

No longer are they looking to the question of whether “Bob the Buyer wants to bail” (subjective) but “what would a reasonable person in Bob the Buyer’s situation want to do” (objective).

It is in fact possible to draft a clause which still meets the subjective test, but that’s certainly not part of any of the OREA Forms or Clauses. If there is a new case before the Courts today, it will take 7 years before it gets to the Supreme Court of Canada. These types of cases come up very rarely.

Brian Madigan LL.B., Broker

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