May 6th - 2008

LEGALBEAT: Initialled counter-offer stands

The buyer presented an offer to the seller who discussed it with her husband. Subsequent discussions and negotiations also involved the husband.

The buyer presented an offer to the seller who discussed it with her husband. Subsequent discussions and negotiations also involved the husband.
 
They decided to sell if the price was $65,000 an acre and if they could remain in the home for 3 years. Changes were made to the offer and a 3-year occupancy clause was added as a schedule and initialled by the seller. The counter-offer was made irrevocable until September 6th.
 
The buyer agreed to sign the counter-offer but preferred the occupancy period to be changed from three years to one year. However he did not want to lose the deal so he accepted the counter-offer. On the same day the buyer signed an Amendment to Agreement offering to change the occupancy date. Those were to be delivered to the seller, but she was not available. The husband of the seller was informed of the acceptance and the suggested amendment and they were also delivered to the seller's address.
 
The seller then took the position that there was no agreement – the buyer sued. The judge reviewed all of the circumstances and decided that there was a validly enforceable agreement, and that the notice had been communicated to the seller's agent (husband) within the required time limits under the circumstances.
 
The buyer was awarded damages of $270,763 for breach of contract.

Pyne v Footman 2007 CanLII 12712

MERV'S COMMENTS
This is an interesting judicial discussion of several legal concepts of acceptance, communication, agency, timing, deposits and damages for breach of contract. The cautious buyer accepted the offer, drafted a suggested amendment and sent a covering letter that confirmed that the offer had been accepted and that the amendment was also enclosed.
 
Using OREA's new Amendment Form 120 could help solve some of these issues as it clearly states that it is an offer to amend and if not accepted, will be void and the original agreement will continue. If it is being used to suggest a change in an existing conditional agreement, be careful to ensure that the irrevocable date is before the end of any conditional date in the original agreement.

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