Humber/Ontario Real Estate Course 3 Exam Practice

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When is a direction or consent clause used?

Is used when one of the parties gives an authorization relating to the agreement of purchase and sale.
Is either permissive or restrictive in nature.
Is used when one of the parties represents and warrants an existing fact.
Is used when some fact about the property being transacted requires clarification.
Is necessary for every real estate transaction.
Is utilized during the final closing only.

The correct answer is: Is used when one of the parties gives an authorization relating to the agreement of purchase and sale.

A direction or consent clause is employed when one party grants authorization related to the agreement of purchase and sale. This clause serves as a way for a party to indicate their approval or agreement to a particular action within the context of the contract. Such authorization is vital as it can allow the transaction to proceed and ensures that all involved parties are on the same page regarding their rights and responsibilities. In real estate transactions, clear communication and consent from all parties are essential for legal and practical reasons. The credibility of this clause lies in its ability to streamline actions that might require validation, facilitating smoother operations in the transaction process. The other options do not accurately capture the primary function of a direction or consent clause. For instance, the notion of being permissive or restrictive relates more to the nature of the agreement rather than the clause's specific purpose. Similarly, representing or warranting an existing fact involves different legal principles and does not pertain to authorization. Additionally, while clarification about facts may be necessary in real estate transactions, it is not the primary role of a direction or consent clause. Consequently, this clarification is focused on providing party consent rather than being universally essential to all transactions or restricted to final closings.