On April 13, the Barclays Signed an Agreement to Purchase

Essay

On April 13, the Barclays signed an agreement to purchase certain property owned by the Taylors for the sum of $15,500. The purchase and sale agreement did not specify a form of payment except that the purchasers were to pay a deposit of $500 in cash and the balance on closing. The date of closing was set out in the agreement as July 1^st. The agreement also contained the following provision:
"This sale is conditional for a period of 15 days from the date of acceptance upon the Purchaser being able to obtain a first mortgage in the amount of ten thousand dollars ($10,000), otherwise, this agreement shall be null and void and all deposit monies shall be returned to the Purchaser without interest or penalty. This sale is also conditional for a period of 15 days from the date of acceptance upon the Purchaser being able to secure a second mortgage in the amount of $2,500 for a period of five (5) years, otherwise, this agreement shall be null and void and all deposit monies shall be returned to the Purchaser without interest or penalty."
The Barclays were able to arrange for a first mortgage of $12,000 and, on April 28^th, a notice in the following form was delivered to the Taylors:
"This is to notify you that the condition specified in the agreement of purchase and sale between the Vendors and Purchasers has been met. The transaction will therefore close as per the agreement."
On July 1^st the Barclays presented a certified cheque to the Taylors in the amount of $15,000. The Taylors, however, refused to deliver the deed to the Barclays on the grounds that the condition in the purchase and sale agreement had not been complied with. The Barclays then instituted legal action against the Taylors.
Discuss the nature of this action and the defences, if any, which may be raised. Render a decision.
D.L.R. (3d) 693, this case explores the issues of tender, condition precedent, specific performance and, tangentially, waiver.
The purchasers will attempt to succeed in an action for specific performance. Having offered payment in the full amount of the contract and exhibiting their readiness and willingness to complete the transaction they will argue that the vendors must deliver the land. Also, the conditions in the agreement for the benefit of the purchasers were met to their satisfaction. Having notified the vendors to this effect, the purchasers argue that performance is now essential to discharge their agreement.
The vendors are entitled to raise defences with respect to the tender of payment and the condition precedent. The form of payment was not specified in the agreement with the exception of the deposit in cash. The implied form is, then, cash in the exact amount. The purchasers, by tendering a certified cheque, albeit in the exact amount, have failed to properly tender payment and the vendors may properly refuse to accept the payment and deliver up the land.
Moreover, the agreement set out a sequence of events in the form of conditions precedent that must be met prior to the agreement becoming enforceable. The conditions stipulated the occurrence of two specific events but failed to state that either party has the right to waive the condition in order to establish the contractual rights and to enforce the agreement on the other party. Essentially, waiver or the right to waiver, must be mutually agreed upon by the parties in order to establish consideration for the promise. Therefore, one party alone may not waive the condition upon which the right to enforcement of the contract rests. On the grounds that the conditions were not waived, the vendors argue that they cannot be forced to deliver up land under a contract which has not come into effect. The condition as specified in the agreement was never met and, thus, both parties are discharged from performance.
The Ontario Court of Appeal found for the purchasers on the basis of facts concerning the nature of the condition precedent which are beyond the scope of the text discussion.