Humber/Ontario Real Estate Course 4 Exam Practice

How can an irrevocable date bind a buyer in a purchase and sale agreement?

1. Buyers can change their mind at any time.

2. Agreement must have a 48-hour irrevocable period.

3. Agreement under seal binds the buyer.

4. Automatically expires at midnight.

5. By mutual agreement of both parties.

6. With a sufficient financial deposit.

The correct answer is: Agreement under seal binds the buyer.

The concept of an irrevocable date is crucial in a purchase and sale agreement as it delineates the time frame during which an offer must be accepted and cannot be revoked by the buyer. When an agreement is under seal, it establishes a more formal and binding commitment that generally enhances the enforceability of the contract. This binding nature means that once the offer is made, the buyer cannot simply withdraw their interest before the set irrevocable date, thus solidifying their standing in the transaction. In contrast to other options, the necessity for an irrevocable date does not inherently require that buyers can change their mind, nor does it specify a 48-hour period, nor does it focus on mutual agreement or reliance on a financial deposit. Essentially, an agreement under seal adds a layer of obligation beyond standard contractual agreements, reinforcing that the buyer is bound to the terms outlined in the purchase and sale agreement until the irrevocable period ends or the offer is accepted.