Contract Law for Real Estate Flashcards

What are the essential elements required to form a valid contract for the sale of real estate in Ontario?

Answer: Offer, acceptance, consideration, intention to create legal relations, capacity of parties, and legality of purpose

A valid real estate contract in Ontario requires all essential elements of contract law: a clear offer, unconditional acceptance, consideration (usually the purchase price), intention to be legally bound, legal capacity of all parties, and a lawful purpose.

Under the Ontario Statute of Frauds, what is required for a contract for the sale of land to be enforceable?

Answer: The contract must be in writing, signed by the party to be charged

The Statute of Frauds requires that contracts for the sale of land or any interest in land must be in writing and signed by the party against whom enforcement is sought. Verbal agreements for the sale of land are generally unenforceable.

In Ontario, what is 'consideration' in a real estate contract?

Answer: Something of value exchanged between the parties, typically the purchase price in exchange for the property

Consideration is something of value that each party provides to the other. In a real estate contract, the buyer provides the purchase price (consideration) in exchange for the seller's transfer of the property (consideration). Both sides must give something of value.

What happens when a buyer or seller lacks 'capacity' to enter into a real estate contract in Ontario?

Answer: The contract may be voidable, meaning the party lacking capacity can choose to affirm or avoid the contract

If a party lacks legal capacity (e.g., a minor, a person of unsound mind, or an intoxicated person), the contract is generally voidable at the option of the incapacitated party. They can choose to affirm the contract when capacity is restored or avoid it.

In Ontario real estate, what is the legal effect of a 'counter-offer'?

Answer: It terminates the original offer and creates a new offer that the other party can accept or reject

A counter-offer legally terminates the original offer. It creates a new offer with modified terms that the other party can accept, reject, or counter. The original offer cannot be revived without a new offer being made.

What is an 'irrevocable' period in an Ontario Agreement of Purchase and Sale?

Answer: The period during which the offer cannot be revoked by the offeror, giving the recipient time to consider it

The irrevocable period is the time during which the person making the offer agrees not to withdraw it. This gives the other party time to consider, negotiate, or accept the offer. Once the irrevocable period expires, the offer lapses if not accepted.