There are three kinds of Conditions:
1) True Conditions Precedent,
2) Conditions Precedent, and
3) Conditions Subsequent.
A True Condition Precedent involves a decision by a Third Party. It cannot be waived.
Any other condition can be written either as a Condition Precedent or a Condition Subsequent.
To advance to the unconditional stage, for a Condition Precedent, you needed a Waiver, and for a Condition Subsequent there was no paperwork required at all.
The Supreme Court of Canada determined that a Waiver was not going to work for a True Condition Precedent in 1959. In the 1960’s Edmund Brown who was a legal wordsmith came up with a different document, namely a Notice of Fulfillment (NOF) and a Notice of Satisfaction (NOS). The documents were essentially the same, but he drafted up the wording for the two large legal stationers, Dye & Durham and Newsome and Gilbert, who were his clients.
For D&D the standard APS was called an “Offer to Purchase”. Since that name was taken, he used “Agreement of Purchase and Sale” for his other client Newsome and Gilbert.
These two documents were solely and only directed to the True Condition Precedent. His personal view and that of several others at the table (1970’s and early 1980’s) was that no actual document of any kind was needed for a True Condition Precedent. Fast forward to the Ontario Court of Appeal in 2018, and they agreed, no actual document was required by the two parties to the agreement. The operative time was the “decision” by the Third Party.
It was realized that the NOF or NOS could also be used for Conditions Precedent. Nothing was required at all for a Condition Subsequent. So, by the mid 1980’s OREA started to be involved and suddenly now we have a great deal of discussion about the NOF and the Waiver. Yes, if you use one or the other, there is the same identical effect: “the deal becomes unconditional”.
There no extra meaning behind the NOF or NOS. We don’t pose the question: “on a scale of 1 to 10, just how satisfied are you”. The simple execution of the document moves the deal over to “unconditional”. Nothing more! No mind reading!
So, here’s where we are at this moment:
1) True Condition Precedent, no paperwork required,
2) Condition Precedent, either NOF, NOS or Waiver will do,
3) Condition Subsequent, no paperwork required.
Essentially, this leaves us in the same position that we were in in 1958. There’s actually no need at all for either the NOF or NOS. Waivers are all we need!
Brian Madigan LL.B., Broker