Humber/Ontario Real Estate Course 3 Exam Practice

What is the usual requisite for including an irrevocable clause in a sales agreement under seal?

1. Must be binding immediately upon signing

2. Must be accepted by warden

3. Must undergo a notary public review

4. Offer becomes irrevocable after seller review

5. Offer revocation is permissible prior to signing

6. Review by the Ministry of Commerce

The correct answer is: Must be binding immediately upon signing

Including an irrevocable clause in a sales agreement under seal typically requires the agreement to be binding immediately upon signing. This characteristic is essential because an irrevocable clause signifies that once the offer is made, it cannot be withdrawn for a set period, reinforcing the commitment of both parties involved in the transaction. This ensures clarity and security in the transactional process, as the party making the offer is assured that their proposal will be held without the risk of revocation until the specified time elapses. In the context of real estate, such irrevocable clauses are crucial because they facilitate negotiations and foster trust between buyers and sellers. Parties need to know that once they sign, they are entering into a binding commitment, which supports the integrity of the agreement. While the other options present various procedural actions that might seem relevant in different contexts, they do not specifically address the foundational legal requirement of binding nature upon signing that underscores the purpose of an irrevocable clause in such agreements.