Humber/Ontario Real Estate Course 4 Exam Practice

Which feature is specific to a true condition precedent in a real estate contract?

1. It can be waived by the parties involved.

2. It must be satisfied by a third party.

3. It is not typically used when obtaining a severance.

4. It remains valid even if the condition isn't met.

5. It does not require legal consultation.

6. It can usually be adjusted after agreement signing.

The correct answer is: It must be satisfied by a third party.

A true condition precedent in a real estate contract is an event or condition that must occur before a party is obligated to perform their contractual duties. The characteristic that stands out for a true condition precedent is that it often requires satisfaction from a third party. This means that some external approval or confirmation must be achieved before the contract can proceed, such as obtaining financing, regulatory approvals, or confirmation of property conditions from an inspector. This aspect of requiring a third party’s involvement is crucial because it highlights the dependency on an outside factor that can influence the contract's validity, making it a significant feature that distinguishes true condition precedents from other types of contractual conditions.