Humber/Ontario Real Estate Course 2 Exam Practice

Which statement about condition precedent clauses in real estate agreements is correct?

1. A condition precedent clause assumes a binding agreement.

2. An escape clause is included for the buyer's benefit.

3. Where possible, multiple conditions should be stacked with one fulfillment date and a waiver provision.

4. Seller take back mortgages must be fully open.

5. A condition must always be for the buyer's benefit.

6. Condition precedent clauses cannot be waived.

The correct answer is: Where possible, multiple conditions should be stacked with one fulfillment date and a waiver provision.

In real estate agreements, a condition precedent clause is a provision that specifies certain conditions that must be met before the agreement becomes binding. Option C is correct because when possible, multiple conditions should be stacked with one fulfillment date and a waiver provision. This means that all specified conditions must be satisfied by a certain date, and the parties have the option to waive those conditions if they choose to do so. To provide further context, let's briefly discuss why the other options are incorrect: Option A is incorrect because a condition precedent clause actually sets conditions that must be met before an agreement becomes binding. Option B is incorrect because an escape clause is typically included in a contract to allow a party to back out under certain conditions, not necessarily only for the buyer's benefit. Option D is incorrect because seller take back mortgages do not necessarily need to be fully open in a condition precedent clause. Option E is incorrect because conditions precedent can benefit either party, not just the buyer. Option F is incorrect because condition precedent clauses can indeed be waived by the parties involved.