Humber/Ontario Real Estate Course 4 Exam Practice

In what scenario is an escape clause typically included in a real estate contract?

1. For the seller's benefit

2. For the buyer's benefit

3. For both buyer and seller's benefit

4. For the mortgagee's benefit

5. For the listing brokerage's benefit

6. For the appraisal's benefit

The correct answer is: For the buyer's benefit

An escape clause is commonly included in real estate contracts to provide particular protections or options for one party. In this case, the rationale for its inclusion primarily centers around the buyer's benefit. An escape clause allows buyers to withdraw from the contract under certain conditions, such as failing to secure financing or if they discover issues during an inspection that were not disclosed. This clause is essential for buyers as it provides a safety net, safeguarding them from being locked into a deal that may no longer be in their best interests due to unforeseen circumstances. While an escape clause can potentially benefit sellers under specific negotiations, its primary design is to protect buyers in uncertain situations. It facilitates peace of mind for the buyer, knowing they have options if the deal changes unexpectedly. The other options listed do not align with the typical functioning of escape clauses as they do not address the primary concerns of buyers looking for flexibility and assurance in their purchasing decisions.