Acceptance Time in Ontario Real Estate

What “Time” is Acceptance? (2)

This situation is very similar, but naturally slightly different from our first example.

Here’s question two.

Sam the seller lists with Bob of ABC Brokerage.
Bill the buyer is represented by Mary of XYZ Brokerage.
Bill likes the house and submits an Offer through Mary.

Here’s the TIMELINE

Monday

4:00 pm      Mary drafts Offer, irrevocable until 11:59 Monday
8:00 pm      Mary presents Offer
9:00 pm      Sam wants another 20K, he signs back

It’s late, so he gives Bill until 9:00 pm Tuesday irrevocable

Mary advises Bob that she is flying south on Tuesday evening. She will do her best to get things done before she goes. Would Bob email a copy to her, if they can work out a deal. And, if she’s not reachable, then Andrew of her office will handle things while she’s away.

Tuesday

6:00 pm      Mary speaks with Bob, and suggests counter at 15K more

6:50 pm      Bob calls Sam, and Sam says that would be fine

7:10 pm      Bob calls Mary and indicates Sam’s wishes

7:20 pm      Mary drafts Offer
7:30 pm      Mary calls Bob says she is faxing over the Offer
7:35 pm      Mary faxes the Offer to Bob’s office
7:36 pm      Bob faxes the Offer to Sam
7:42 pm      Sam faxes it back to Bob’s office APS signed and COA signed at 7:40 pm
7:45 pm      Mary emails Bob that her flight is about to leave
7:46 pm      Bob emails a copy to Mary
7:50 pm      Bob not hearing from Mary emails a copy to Andrew
8:00 pm      Bob faxes a copy to XYZ Brokerage

8:01 pm      XYZ receives fax

8:05 pm      XYZ forwards APS to Andrew

8:07 pm      Andrew phones Bob and acknowledges that he has a copy

11:00 pm    Mary emails Bob and says thanks for her copy

So, we have a deal in this scenario, but the question quite simply is “when is the deposit due”?

Assume the Offer states “upon acceptance”. When is the deposit actually due? Precisely, to the minute. Forget about seconds, just round off to the correct minute.

Fred, is annoyed, he just missed out on another property. This was his second choice, but now it’s his first. He’s ready to put in a better Offer, actually another $15K over the present deal. He’s in standby mode, hoping this deal will fall through.

Bob included a clause permitting Sam to terminate the deal if the deposit is not paid in time. That’s helpful because Sam would like to accept Fred’s Offer, if possible.

One minute after the failure to deliver the deposit, whatever time that happens to be, Sam can start dealing with Fred’s Offer.

Back to our one simple question: precisely to the minute, when was the Offer accepted, and when is the deposit due?

Answer

This situation is somewhat different because we are using faxes. The Electronic Commerce Act in Ontario will preclude the use of emails for delivery and acceptance of the APS.

There was no independent discussion which could have altered the timing. The time the fax was sent, it was deemed to be received, even if it rolled off the machine at XYZ one minute later. So, 8:00 pm was it. The communication of the acceptance and the delivery of the APS occurred simultaneously. The time on the COA is wrong. It was signed by Sam in error.

There was no acceptance at that time. The deposit would be due 23 hours and 59 minutes later, namely 7:59 pm on Wednesday. Mary or Andrew should immediately challenge the time of acceptance on the COA because a number of issues could flow from that. Also, if you are in a Province or State where e-commerce is permitted for real estate transactions, then Bob’s email to Mary at 7:46 pm would constitute acceptance and the clock would start running from then. It is also possible to argue that the same is true in Ontario NOW.

The problem is that there aren’t any cases which provide proper guidance on this point. And, there aren’t likely to be any before the proclamation. So, stay out of trouble. Be on the safe side, and be careful. You really don’t want to be the “test case”. My best guess is that 7:59 pm is the right answer (90% certainty) and 7:45 pm is the right answer (10% certainty). So, that’s about as clear as mud.

One more issue! Sam put 7:40 pm on the document. Sam will not be able to argue later on that it was some other time. Bill could, but not Sam. Sam is going to find out that he is stuck with the 7:40 pm time. Even though it’s incorrect, he is prevented from introducing any evidence to the contrary. The reason will be found in the law of Evidence, not the law of Contracts. That means 7:39 pm is also a correct answer. PS…with all these correct answers….and everyone is happy….. I think I’m going to run for politics!