Humber/Ontario Real Estate Course 2 Exam Practice

What is a direction or consent clause used for in real estate transactions?

1. To clarify facts about the property.

2. To give authorization for certain agreement activities.

3. To provide a warranty on property conditions.

4. To limit certain actions within the agreement.

5. To represent an existing fact.

6. To restrict certain actions of the buyer.

The correct answer is: To give authorization for certain agreement activities.

A direction or consent clause in real estate transactions is used to give authorization or permission for specific activities or decisions within the agreement. This clause establishes who has the decision-making power and control over certain aspects of the transaction. For example, it may outline who can give instructions for handling funds, approving changes to the agreement, or making decisions on behalf of the parties involved. By including a direction or consent clause, parties ensure that important decisions are made with the appropriate authority and that agreed-upon procedures are followed. The other options are incorrect because: - Clarifying facts about the property (Option A) is typically done through property inspections, disclosures, and representations, rather than through a direction or consent clause. - Providing a warranty on property conditions (Option C) is usually covered in separate sections of the agreement, such as representations and warranties. - Limiting certain actions within the agreement (Option D) would be covered by specific clauses or provisions that restrict behavior, not necessarily by a direction or consent clause. - Representing an existing fact (Option E) is typically addressed through representations and warranties in the agreement, rather than through a direction or consent clause. - Restricting certain actions of the buyer (Option F) would be covered by provisions that outline obligations and responsibilities, rather than through a direction or consent clause.