Buyer's Signed Agreement with No Conditions, But Walked Away Prior to Delivering Deposit

WinterSleep wrote: ↑ Under common law a contract without consideration (deposit) is not a legally enforceable or valid contract.

How sure are you on that? I would have thought the "consideration" would have been the purchase price/property being sold. The deposit is just part of the transaction.

https://www.thestar.com/business/person ... osits.html

Can the buyer get out of a deal by refusing to pay the deposit?

No. Once the deal is accepted, you can’t change your mind. If you do, the seller can sell the property again and if he gets less money than you were going to pay the seller can sue you for the difference, plus legal fees.

https://eriesedge.com/2015/06/real-estate-deposits

2. Can the buyer get out of a deal by refusing to pay the deposit?

No. Once the agreement of purchase and sale has been accepted by both buyer and seller, a binding contract exists. Failure to deliver the deposit may be determined a breach of contract by the Buyer.

I’ve heard it said that a good lawyer will be able to get a client out of a real estate contract should the buyer change his or her mind. This is not the case in my experience. Your REALTOR® should understand contract law and all of the complexities and legalities to making certain that real estate contracts are airtight once all conditions have been waived or fulfilled.

Should a buyer wake up the morning after with a serious case of buyer’s remorse and refuses to pay the deposit, the seller can sell the property to another buyer. In the event that the seller gets less money than the initial buyer agreed to pay the seller can sue the buyer for the difference (plus legal fees).

https://torontorealtyblog.com/blog/buyer-get-deal/

If the buyer, the morning after the deal is reached, does not provide the deposit cheque, then the seller can sue the buyer for not following through with the transaction.

C

CNeufeld wrote: ↑ Most people don't walk around doing real estate viewings with $5k or more in pocket change. We haven't been house hunting for about 4 years now, but last time we placed offers 3 times, and in each time, we made the offer, and followed through on the next business day with a cheque for our realtor.

ETA: This was in Edmonton...

C

After I do viewing, if I decide to put down an offer, I would attach deposit with it, but that is after the viewing and the cheque goes to the realtor, I don't carry $5k on me to the viewing.

DRGN89 wrote: ↑ The contract is signed with the consideration included with the promise to deliver the deposit within 24 hours. How does this allow the buyer to void the contract without mutual agreement from the seller just because they didn't deliver it. If this was the case then everyone would take advantage of this in real estate transactions.

Plus, in common law terms the term "consideration" means offering something in exchange for something else. So when you apply this to real estate, the consideration would be the buyers purchasing my property for X amount of dollars.

CNeufeld wrote: ↑ How sure are you on that? I would have thought the "consideration" would have been the purchase price/property being sold. The deposit is just part of the transaction.

https://www.thestar.com/business/person ... osits.html


https://eriesedge.com/2015/06/real-estate-deposits


https://torontorealtyblog.com/blog/buyer-get-deal/


C

A contract without consideration is not legally enforceable. Irrespective the contract has a status certificate so even if they delivered the deposit they can just reneg so OP is just wasting his time trying to extract money based on technicalities and it doesn't seem to be on good faith. Just move on and thank them for not wasting your 3-4 weeks until status certificate comes in (not to mention the price of the certificate).

WinterSleep wrote: ↑ A contract without consideration is not legally enforceable. Irrespective the contract has a status certificate so even if they delivered the deposit they can just reneg so OP is just wasting his time trying to extract money based on technicalities and it doesn't seem to be on good faith. Just move on and thank them for not wasting your 3-4 weeks until status certificate comes in (not to mention the price of the certificate).

But there IS consideration. The buyer can't simply decide not to pay any money, thereby removing THEIR side of the "consideration", in order to void the contract. The deposit is merely a portion of the purchase price, nothing more.

And, as mentioned in the articles I posted, if the buyer wanted to withdraw their offer based on something the the status certificate, they would still need to provide their deposit cheque, get the status certificate, and then at least pretend to look it over and say no. If they don't, then they didn't enter the agreement in good faith, and again, they're game to be sued. Again though, depends on how much damage the seller incurred, etc. There's another thread in this forum on exactly that topic.
Quote from third article I posted:

Now, let’s turn our attention to the real question of “When can a buyer get out of a deal?”

Let’s look at when the buyer has no real right to do so, but wants to, usually because they change their mind.

First, let’s look at the case where the buyer changes his or her mind, during a conditional period.

Let’s say a buyer purchases a condominium conditional on the lawyer’s review of the Status Certificate.

But that night, the buyer gets cold feet, and wants out of the deal.

No problem, right? The buyer has a condition – they can get out of the deal.

True.

However, the buyer needs to ensure that they use that condition, and not simply change their mind. And this is where things get interesting.

If the buyer, the morning after the deal is reached, does not provide the deposit cheque, then the seller can sue the buyer for not following through with the transaction.

Instead, the buyer should provide the deposit cheque, which will be held in trust by the listing brokerage, go through the motions to have the Status Certificate reviewed, not sign the Waiver or Notice of Fulfillment, and then when the deal falls through, ask for a Mutual Release, and the deposit back.

It sounds crazy, I know. Most of you would say, “I would never hand over the cheque and then try to get it back.”

But ask a lawyer, and they’ll all tell you this is the way it’s done. If you don’t provide the cheque, the seller can sue you. It’s cut and dry.

C

Oh Boy!

The buyer is in breach of the agreement.
The deposit IS NOT consideration. It is one of the terms of the contract. The consideration is the purchase price offered and the SEAL under which the buyer signred.

The seller has every right to remarket the property, they need to first have their lawyer advise the other side of this fact.

The realtor whose blogis quoted above about the deposit was at one time too telling hsi readers that no deposit, no contract.

That is absolutely incorrect!

You can remarket the property and sue for the deposit which you are owed and will be granted unless you screwed up the offer.

well the op can lawyer up and let us know how it turns out.

licenced wrote: ↑ Oh Boy!

The buyer is in breach of the agreement.
The deposit IS NOT consideration. It is one of the terms of the contract. The consideration is the purchase price offered and the SEAL under which the buyer signred.

The seller has every right to remarket the property, they need to first have their lawyer advise the other side of this fact.

The realtor whose blogis quoted above about the deposit was at one time too telling hsi readers that no deposit, no contract.

That is absolutely incorrect!

You can remarket the property and sue for the deposit which you are owed and will be granted unless you screwed up the offer.

Which blog article said that?

C

Oh man, the previous realtor is wrong, you can't

sue for the deposit

You can try to sue for losses if you sell it for less than originally agreed with failed to deliver a deposit buyer.

You don't need a mutual release.

What you need is that a lawyer send them and their agent a written notice saying that they are in breach and if they do not give the deposit by xx date, you will consider breach of agreement and list the property and sue them for any damages.

DRGN89 wrote: ↑ I understand that I should talk to a lawyer and I will. I just wanted to know if anyone had any experience in dealing with this so I can know what to expect.

CNeufeld wrote: ↑ Which blog article said that?

C

torontorealtyblog prior to realizing the non-payment of the deposit breached the APS used to tell its readers that non-payment of the deposit voided the deal.

ilim wrote: ↑ Oh man, the previous realtor is wrong, you can't

You can try to sue for losses if you sell it for less than originally agreed with failed to deliver a deposit buyer.

If you mean I am wrong, you should check your facts and not guess.

The Deposit is first and foremost to be forefeited to the seller and requires no losses to be proven - the vendor may even collect the deposit even if they sell for more. You're confused obviously as when suing for losses the deposit amount is applied to whatever losses are awarded. I have no idea where you got the idea you can try to sue for losses versus keeping the deposit.

Canliiconnects: The Defaulting Buyer Loses His Deposit

Breaches of contract in real estate deals are not treated the same as other contracts, which is why the buyer loses the deposit. In contract law in general, there is a presumption against the enforcement of penalties. Generally, the injured party is only compensated to the extent that it can show that it has suffered damages due to the buyer failing to carry through with its purchase agreement.

One might think that in some situations it would be unfair for the seller to keep the deposit. Suppose that the seller can quickly resell the property at an even higher price to somebody else, leaving the seller better off due to the first deal having been broken off by the buyer. Despite that benefit, the seller still keeps the deposit.

I fully expect the general public like yourself to not understand and they should refrain from answering definitively that which they do not certianly know. But it's disgraceful that we have realtors not understanding the difference between the deposit and consideration (the purchbuyer's entire promise in exchange for title) and the seal in lieu of consideration. here is some relevant information:....

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Anticipatory repudiation does not end the APS. Instead, it gives the innocent party a choice between two options: (i) accept the termination of the APS; or (ii) reject the termination and continue with the sale transaction.[12]

If the innocent party chooses to accept the termination of the APS, neither party has any further obligation under the APS (e.g. there is no need to tender). The innocent party may immediately bring a damages claim against the breaching party. However, specific performance is not available. Acceptance of termination is irrevocable once it is communicated.
https://www.mcmillan.ca/Anticipatory-Re ... e-and-Sale
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A deposit is not consideration, WestlawNext Canada The purpose of signing under seal...
A simple contract not under seal requires consideration to support it in order to be legally binding. This means that each contracting party must exchange something of value, in the sense that the act or promise of one party must be "bought" or "bargained for" by the act or promise of the other. Hence, a gratuitous or voluntary promise or payment cannot be enforced or retained against its maker.

A contract under seal is binding without consideration, because either the formality of the sealing displaces the need for consideration, or the seal is treated as importing consideration.
https://www.westlawnextcanada.com/acade ... contracts/
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Brian Madigan Lawyer
Answers the question within the first miniute of this video for thos who'd rather not read this
https://www.lawrencemak.com/what-are-tw ... -deposits/
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Mark Weisleder - Real Estate Lawyer
[an the buyer get out of a deal by refusing to pay the deposit?

No. Once the deal is accepted, you can’t change your mind. If you do, the seller can sell the property again and if he gets less money than you were going to pay the seller can sue you for the difference, plus legal fees.

What happens if the deposit is paid late?

The seller has the right to cancel the deal.
https://www.thestar.com/business/person ... d%20option.
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Pallett Valo LLP
The deposit acts as an incentive for the purchaser to complete the agreement of purchase and sale. Without a deposit, the buyer will not feel the immediate pain of improperly failing to comply with its obligations under the contract. While it is true that a vendor could sue on the agreement of purchase and sale for damages even in the absence of a deposit, this typically involves a long, drawn-out and costly litigation process. Accordingly, a vendor should be satisfied that the amount of a deposit covers possible damages such as subsequent sale at a lower sale price.
_________________________________________________________

The Cases upon which it rests:
The plaintiffs, Kai Xu and Win Lam Benjamin Kong (the “Purchasers”), and the defendant, 2412367 Ontario Limited (the “Vendor”), entered into an agreement of purchase of sale on July 22, 2016 (the “Agreement”). The Purchasers agreed to a purchase price of $43,980,000 and intended to develop the property as a mixed residential-commercial complex for Chinese senior citizens. The Purchasers failed to meet a deadline for the payment of part of the deposit on the purchase price, after which the Vendor immediately terminated the agreement. The Purchasers claim that the Vendor subsequently agreed verbally at a meeting to revive the agreement and to extend the closing date. The Vendor claims that it properly terminated the Agreement and that modifications to the Agreement can only be made in writing.

[48] Given the clear wording of the Agreement, there is no doubt that the Vendor was entitled to terminate the Agreement when the Purchasers failed to deliver the final deposit payment by 5:00 pm on September 30, 2016, and the Agreement was accordingly properly terminated later that day.
https://www.canlii.org/en/on/onsc/doc/2 ... pletePos=1
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On Sept. 18, 2003, Loblaw Properties Limited signed an agreement with five individual vendors to purchase a parcel of land near Fergus, Ont. for a supermarket.
The agreement called for a deposit of $75,000 to be paid by Sept. 23. It also contained two clauses stating that "time shall be of the essence" of the agreement.
This type of clause appears in virtually every Ontario agreement of purchase and sale for new and resale homes, and for commercial properties as well.
Through inadvertence by Loblaw, the deposit was not delivered until Sept. 30.
Since the deposit cheque was seven days late, the lawyer for the sellers immediately returned it to Loblaw's lawyers. A few days later the vendors signed a deal with Forecast, which had expressed interest in the property after the Loblaw offer was signed.
Everybody then headed to court to determine which deal was binding: the Loblaw purchase or the Forecast one.

Justice Rutherford ruled that Loblaw was in breach of the agreement and could not proceed with its purchase. The sellers were entitled to kill the deal when Loblaw's deposit arrived late.
Last July, the Ontario Court of Appeal dismissed Loblaw's appeal in three short paragraphs.
http://www.aaron.ca/columns/2006-01-07.htm

OP, teach those scumbags a lesson! Sue em for all the money you lost due to the delay.

licenced wrote: ↑ If you mean I am wrong, you should check your facts and not guess.

The Deposit is first and foremost to be forefeited to the seller and requires no losses to be proven - the vendor may even collect the deposit even if they sell for more. You're confused obviously as when suing for losses the deposit amount is applied to whatever losses are awarded. I have no idea where you got the idea you can try to sue for losses versus keeping the deposit.

Yes, sure deposit will be for forfeited in case the buyer walks away from the deal after he put a deposit in and seller can sue for additional compensation if the difference in the sale price is less than the original agreement minus deposit.
In this case, there is no deposit, and the buyer just walked away.
Why would you sue for deposit? You will sue for difference in price if you sell for less. I have no idea how you come up for suing for deposit in this case.

ilim wrote: ↑ Yes, sure deposit will be for forfeited in case the buyer walks away from the deal after he put a deposit in and seller can sue for additional compensation if the difference in the sale price is less than the original agreement minus deposit.
In this case, there is no deposit, and the buyer just walked away.
Why would you sue for deposit? You will sue for difference in price if you sell for less. I have no idea how you come up for suing for deposit in this case.

It doesn't matter that there is no deposit. There was a promise of a deposit that formed a binding agreement.

There was no condition applicable here if that's where your train of thought might be wrongly headed..

Your logic is either to say that - some of the contract not fulfilled cannot be enforced which if true would by default mean the ability to sue for damages incurred can also not be inforced.

It's a silly argument. Not sure why you are grasping at such a straw.

Contracts are not things that can be partly accepted and partly discarded.

licenced wrote: ↑ It doesn't matter that there is no deposit. There was a promise of a deposit that formed a binding agreement.

There was no condition applicable here if that's where your train of thought might be wrongly headed..

Your logic is either to say that - some of the contract not fulfilled cannot be enforced which if true would by default mean the ability to sue for damages incurred can also not be inforced.

It's a silly argument. Not sure why you are grasping at such a straw.

Contracts are not things that can be partly accepted and partly discarded.

Not sure why you are trying to convince that you are right when clearly you are not.
I said contract is in breach and seller can sue buyer for loss of profit if it happens and cost of legal action, that is all it is.
Nobody will sue for deposit as you posted in this case.

ilim wrote: ↑ Not sure why you are trying to convince that you are right when clearly you are not.
I said contract is in breach and seller can sue buyer for loss of profit if it happens and cost of legal action, that is all it is.
Nobody will sue for deposit as you posted in this case.

Except I am correct.

I am not sure why you insist you are right when you clearly don;t know what you're talking about.

To say nobody will sue is to defy the cases that have come before the courts. I've showed you the legal precedence and opinions, I've studied this

you have studied nothing and just guess!

DRGN89 wrote: ↑ There was a deposit included in the agreement that was to be delivered within 24 hours on the offer being accepted. They never delivered the deposit and are thinking this is a way for them to pull out of the deal.

There was no deal without the deposit.

Seriously OP, get over it and move on. Surely your time is better spent trying to sell to a serious buyer.

licenced wrote: ↑ Except I am correct.

I am not sure why you insist you are right when you clearly don;t know what you're talking about.

To say nobody will sue is to defy the cases that have come before the courts. I've showed you the legal precedence and opinions, I've studied this

you have studied nothing and just guess!

Don't know what you been drinking, but I am tired of arguing with you as I am on the go.

Show me precedence of case like that where deposit was not paid where suing was for deposit, end of story as you won't find one.

Oh and you're being dishonest now. You said I was wrong were I said seller can sue for the unpaid deposit. The bolded in red is as clear as mud.

ilim wrote: ↑Oh man, the previous realtor is wrong, you can't sue for the deposit
You can try to sue for losses if you sell it for less than originally agreed with failed to deliver a deposit buyer.

ilim wrote: ↑ Not sure why you are trying to convince that you are right when clearly you are not.
I said contract is in breach and seller can sue buyer for loss of profit if it happens and cost of legal action, that is all it is.
Nobody will sue for deposit as you posted in this case.

Furcorn wrote: ↑ There was no deal without the deposit.

Seriously OP, get over it and move on. Surely your time is better spent trying to sell to a serious buyer.

Stop giving out incorrect advice!

Brian Madigan Lawyer
Answers the question within the first minute of this video
https://www.lawrencemak.com/what-are-tw ... -deposits/