Humber/Ontario Real Estate Course 3 Exam Practice

When should the irrevocable clause in a purchase agreement be modified?

1. Before the first buyer review.

2. When negotiating a counteroffer to change the purchase price.

3. Only after all parties have signed the agreement.

4. When there’s a dispute over the terms of the agreement.

5. If the buyer requests additional conditions to be included.

6. When seeking external legal consultation.

The correct answer is: When negotiating a counteroffer to change the purchase price.

The modification of the irrevocable clause in a purchase agreement is typically necessary during negotiations, particularly when changing fundamental aspects such as the purchase price. During negotiations, if a counteroffer is made that affects the terms of the original agreement, including the irrevocable clause, it needs to be adjusted accordingly. This is crucial because the irrevocable clause indicates until when the offer must be accepted, and any changes to the purchase price or other significant terms require a corresponding update to this clause. When it comes to real estate transactions, negotiations are an integral part of the process. An adjustment may reflect the new conditions that both parties agree upon. In contrast, modifying the clause after all parties have signed or in response to disputes typically means dealing with finalized terms, which is less effective for ensuring that all parties are aware and agreeable to any changes. Moreover, while seeking legal consultation or addressing additional requests are important aspects of the transaction, they usually happen after the binding terms have been established, rather than during the negotiation of crucial changes.