The Consumer Protection Act (CPA) stipulates that you must get a written contract for any transaction worth more than $50. That applies for transactions as large or minor as:
- Any product or service you buy at home from a door-to-door salesperson
- Any business or individual you hire for their services
- Subscription services like music or magazine
- Your payment for membership in a club
According to the law, such a contract is legally binding and must include all the pertinent details of the purchase and the qualifying terms. If you want to get out of a purchase agreement for any reason, it will help to consult business lawyers in Thornhill to understand your legal options. They can guide you on the steps to take, as the other party will likely fight back.
When Can I Cancel a Home Offer or Purchase Agreement?
You can withdraw from an offer or counter-offer if there’s a time limit, and it lapses without being accepted. You can also withdraw before the other party formally appends their signature on the contract as a sign of acceptance. Offers and counter-offers are usually irrevocable within a time specified by the person making the offer.
However, if there’s no offer acceptance, then a legal contract doesn’t exist. The person making the offer isn’t legally bound by law to keep the offer open. Additionally, it’s possible to terminate a Purchase or Sale Agreement if the contract is “frustrated.” That means it becomes impossible to carry on with the contract through the no-fault of either party.
What Happens When an Offer Has Been Accepted?
You and the other party become legally bound by a purchase agreement once you formally accept it. There are costly consequences that come with backing out of a contract.
For example, courts in Ontario have been busy with litigation for failed purchase contracts in real estate over the last few years, and you may want to avoid going this way. Contract agreement lawyers in Thornhill can evaluate your case and guide you on the best way forward.
How Can I Get Out of a Purchase Agreement As a Buyer?
It’s uncommon for buyers to back out of a real estate purchase contract, at least not without a fight from the seller. Getting out of the deal also attracts potentially severe repercussions, but they can still use a few strategies to walk away:
Exercise One of the Contingencies
Legal buyer contingencies include:
- The home inspection reveals problems with the house
- The appraisal is less than what is in the purchase contract
A buyer may refuse to renegotiate the contract after the home inspection, given that most real-estate purchases include an inspection contingency.
Not Agree to Amend the Contract Following a Higher Appraisal Than the Agreed Purchase Price
The buyer can refuse to modify the contract if the appraiser quotes a price above the agreed-upon purchase price. Besides, lenders often won’t grant a mortgage for more than the home’s value. However, this scenario is rare, and when it arises, it is in the buyer’s best interest to engage the services of contract agreement lawyers in Thornhill to evaluate the circumstances.
Agree with the Seller to Cancel the Contract
When no legal avenues exist to get out of the deal, the only remaining option may be to agree with the other party to cancel the purchase agreement. This might not be easy, depending on how much the other party wants the deal to go through. Thornhill business lawyers can help you negotiate an amicable way to end the contract.
What If I Want to Terminate the Contract As a Seller?
The doctrine of caveat emptor rules in real estate transactions, but there are risks for buyers and sellers in a volatile market. These may make them want to get out of the deal.
Use a Contingency to Back Out of the Contract
A seller can back out of a purchase agreement through contingency. The clause in the contract leaves room for one or both parties to pull out of the agreement under specific conditions. Sadly, sellers usually don’t have this option, as most contingencies favour buyers.
The only contingencies that exist for sellers are:
- A short (3-5 days) lawyer review period within which a lawyer can review a contract
- A stipulated time frame for the seller to terminate the contract if they can’t find a replacement home to move into after the sale
- The bump clause, which allows the seller to accept a better offer
Breach of the Contract by the Buyer
Examples of contract breaches by the buyer are:
- Not making an escrow deposit within the deadline
- Not notifying the seller of their inability to secure financing for the purchase
The seller can formally notify the buyer about their decision to pull out of the contract and give them a few days to comply. If you’re in such a situation, ensure you engage the services of Thornhill contract agreement lawyers to notify the buyer within a legal framework to prevent complications.
Defrauding of the Seller by the Buyer
It’s illegal for sellers to lie about a house, and in the same way, buyers can’t use deceitful practices to trick a seller into agreeing to a purchase contract. If a seller proves that a buyer tried to defraud them, they have enough reason to get out of a purchase agreement. However, it would be in their best interest to involve contract agreement lawyers in Illinois before terminating the deal.
A Skilled and Experienced Business Lawyer Helping You with Your Contract Needs
Contracts exist to provide a legal framework between two or more parties. Nonetheless, circumstances will arise when one party isn’t in a position to go through with the contract. In such a situation, you may need the help of a skilled Thornhill contract agreement lawyer to help you resolve the conflict.
You can contact our Ontario business firm to speak to lawyers with years of experience in litigating all types of contract disputes. We can help you determine the best way forward, depending on the case specifics. If the conflict must go to court, we can provide the legal representation you need. Contact us to start your initial consultation.