What does Buyer’s Lawyer’s review and approval mean? Can the Buyer just simply change their mind and get their own lawyer to agree?
This clause can be problematic.
Is it just the legal terms or is it the business terms too?
The clause should have been clear! There is already an obligation in good faith upon your Buyer to complete this deal. The Seller may simply decide to sue your Buyer for the deposit, because he would be in default if it’s not delivered in time. Why would the Seller give a release?
The Seller can re-sell at a lower price, sue your client for the difference, and keep the deficiency, or sell for more and get the amount of the deposit for nothing. All of this seems very risky.
This is not intended as a “weasel clause”. Even if there are other conditions, like inspection and financing, the Buyer better have some major deficiencies and not be able to raise the financing anywhere.
I would be most concerned from the Buyer’s perspective on this one. Another issue is whether or not it was intended to include business terms as well as simply legal terms. That matter should be clarified.
Brian Madigan LL.B., Broker