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What are conditional sales contracts?
A conditional sales agreement is a financing arrangement where a buyer takes possession of an asset, but its title and right of repossession remain with the seller until the purchase price is paid in full. If the business defaults on its payments, the seller will repossess the item.
What is an example of conditional contract?
A common example is a contract conditional upon the buyer getting planning permission. An option agreement will involve an option period where the party with the benefit of an option can call on the other party to either sell them the property or to buy the property from them at a price and on a given date.
Can a seller pull out of a conditional contract?
The Contract of Sale is only binding once the seller and the buyer have signed the document. A conditional Contract means the sale of the property will only occur if certain conditions are met. Including conditions can protect you if those conditions are not met and you want to withdraw from the Contract.
What is a conditional contract in real estate?
A conditional contract is a type of contract where the sale of the property will only proceed if certain conditions outlined in the contract are met. The contract is called ‘conditional’ until the conditions listed are satisfied, at which stage it becomes ‘unconditional’.
Can a buyer back out of a conditional offer?
In most markets, buyers will choose to make a purchase agreement conditional on a satisfactory home inspection. But buyers cannot back out of a deal simply because the inspection found some issues with the house. That could lead to the cancellation of the purchase agreement, Taylor said.
What is the test in determining whether it is a contract of sale or a mere option?
The test in determining whether a contract is a “contract of sale or purchase” or a mere “option” is whether or not the agreement could be specifically enforced. There is no doubt that the obligation of petitioner to pay the purchase price is specific, definite and certain, and consequently binding and enforceable.
What happens if a seller defaults on a contract?
If a seller defaults in any way, you, as the buyer, have similar options. You can sue for monetary damages for breach of contract, termination of the contract and return of the deposit (and possible repayment of expenses), and/or specific performance — in other words, forcing the completion of the sale.
What does it mean if a house is conditionally sold?
The Definition of Sold Conditional When a home is ‘Sold Conditionally’ it means that a buyer and seller have come to an agreement on the sale of the property. Common conditions found in residential real estate contracts include conditions on the buyer arranging financing and a condition on a home inspection.
What are the two types of conditional sales?
If an individual decides to end a conditional sale agreement before the payments are completed then there are two options in relation to the goods:
- to return the goods;
- to allow the creditor to end the agreement and repossess the goods.
Is a conditional contract binding?
A conditional contract is a binding contract for the sale and purchase of property (used in place of the usual contract on exchange) which is subject to satisfaction of a “condition precedent”.
Where can I get legal advice on a conditional sales contract?
If you are looking for more advice on your conditional sales contract and would like to consult a lawyer, you can call the Lawyer Referral Service at 403-228-1722 or toll-free at 1-800-661-1095. Dial-A-Law is a Calgary Legal Guidance public service project funded in part by the Alberta Law Foundation.
What is the difference between conditional and unconditional contracts of sale?
There are two terminologies when it comes to real estate contracts of sale, conditional and unconditional. Depending on the scenario of a sale, will depend on how your offer will considered by the vendor. In competition, an unconditional contract will put you in the driver’s seat.
What happens if the buyer breaks a conditional contract?
If you have a mortgage (although mortgages are a bit different) or entered into a car sale contract with payments, you probably understand the basis of a conditional contract. To put it more simply: If the buyer breaks the conditions in the contract, the seller can take back the property.
Is a conditional offer on a house enforceable?
If the other agreement or condition is performed, then the conditional contract is enforceable and the parties are bound to carry out the terms of the contract. Both the buyer and the seller can request conditions to be included in the offer to a conditional contract.