April 5th - 2009

LEGAL BEAT: Buyer has to keep on trucking

The buyer's agent contacts a seller and asks for a list of permitted uses of the unlisted land zoned "highway commercial." He is given a long list of permitted uses.

The buyer's agent contacts a seller and asks for a list of permitted uses of the unlisted land zoned "highway commercial." He is given a long list of permitted uses. A trucking terminal is not included in that list and the agent does not mention that this is a use required by the buyer.
 
The buyer's agent prepares an offer which provides: This Agreement is conditional for 30 calendar days from the acceptance date hereof upon the following conditions, which are inserted for the buyer's benefit and may be waived in writing by the buyer in whole or in part as the buyer desires at any time or times or failing such wavier, this Agreement shall be null and void and unenforceable and the deposit with accrued interest shall be returned to the buyer without abatement:

  1. Buyer ascertaining from the Town of Caledon that the property is zoned in final and binding form under the relevant zoning by-laws and official plan to permit it to develop or use the said property under the Highway Commercial Zoning for retail store, car and truck sales agency, a commercial garage, an open storage area accessory to a Highway Commercial use, a parking lot, restaurant;
  2. Buyer to exercise his due diligence that this property is suitable for his use;
     

The buyer learns that he cannot use the property for a trucking terminal, cancels the deal and sues for the return of the $50,000 deposit. The judge has to determine the intention of the parties from the contract and whether clause 2 is a stand alone condition to relieve him from fulfilling his obligations. The judge decides that the conditions were for the buyer's benefit, drafted by his agent and any ambiguity should be interpreted in the fashion least favourable to its author. Clause 2 is ancillary to clause 1 and not a separate one. The buyer loses the deposit.

Shoker v Orchard Garden Markets 2007 CanLII 37897

 
MERV'S COMMENTS
It may be that a buyer does not want to disclose an intended use as that may affect the negotiations, including the price. It is therefore necessary to draft clauses carefully and provide for some reasonable - and separate - discretionary abilities as was discussed in the Marshall v Bernard Place case in my earlier MEMOS.
 

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