On January 9th 2024, the Ontario Superior court heard Ali v. Patel. In this case, on June 5th 2023, the buyer had made an unconditional purchase offer on the sellers property. This offer contained an offer summary, offer of purchase and sale and a Schedule A. The following evening, the seller’s agent sent the signed offer package back, keeping all the original documents unchanged but adding a Schedule B. The seller’s agent stated in the email that there was an addition of a Schedule B. This Schedule B included information on banking and how the parties would deal with the transaction, along with other details. The MLS listing for the property had also stated that all offers were required to include Schedule B. The buyer did not respond or deliver the $50,000 deposit required by the Schedule B.
The next day, the buyer explained that they would be unable to proceed due to unforeseen family circumstances and sent a mutual release later that day. This mutual release was not signed by the seller, and the sellers agent sent an email advising that the sellers would hold the buyer liable for any losses or damages. One week later, the seller sold the property for $25,000 less than the previous buyer was going to pay. They then began litigation and the seller brought a motion and argued that the previous buyer was liable for the $50,000 deposit which they were entitled to, and claimed this deposit should have been paid by the buyer.
The court debated whether or not the Schedule B was a counteroffer or not, and came to the conclusion that it was. This meant the buyer was free to accept it or decline it. The argument that there was a binding agreement prior to the introduction of Schedule B was rejected. Without the binding agreement, there is no deposit liability. As a result, the court found that the buyer is not liable to pay the deposit.
This decision by the court shows how adding or changing any terms in a real estate offer can be considered a counteroffer which requires acceptance. Schedules and all other terms should be included in the original offer, or will require additional acceptance.
