Canada: Avoiding Problems in Waiver and Notice Clauses

Last Updated: November 10 2010
Article by Andrew Salem

This article originally appeared in Focus on Real Estate - November 2010

When parties negotiate and draft agreements of purchase and sale for real property, the provisions relating to how conditions may be waived (including what constitutes effective notice of waiver) are not usually treated as highpriority items. Before examining these seemingly minor details, most parties prefer to deal with the substance of the conditions, such as the scope and length of the due diligence period, or whether the agreement will be conditional on development approvals or new leases.

Even after the parties agree on the substantive matters relating to the conditions, it may be important to focus on what the agreement says about how conditions may be waived once the decision has been made to waive or invoke them. Agreements should be drafted to avoid ambiguities and disputes arising from conflicting interpretations, so that the intentions of the party for whose benefit a condition was inserted are not frustrated. At minimum, a party does not want to spend the last day of a conditional period deciding how to properly notify the other party. In addition, nobody wants to expend time and costs after the last day of a conditional period tied up in a dispute about the status of the transaction because the parties disagree on whether the conditions were properly waived.

The recent Ontario case of McKee v. Montemarano1 provides a helpful reminder that it is important to consider and clarify these details when preparing the contract (or as soon as possible afterwards), in order to avoid possible problems down the road. The case follows a line of decisions where purchasers claiming to have waived conditions find themselves in court with vendors who believe they can treat the deals as having been terminated. Illustrations include cases where conditions were purportedly waived by notice over the telephone, by notices handed to security guards, and in several cases, by notices left with real estate agents who did not have authority to receive them on behalf of vendors.

In the McKee case, there was a provision in Schedule "A" to the agreement of purchase and sale stating that "[u]nless the buyer gives notice in writing delivered to the Seller" by a specified time that the due diligence condition has been fulfilled, the agreement shall be null and void. The Schedule "A" provision went on to say that the condition may be waived by the buyer "by notice in writing delivered to the Seller within the time period stated herein." The pre‐printed portion of the agreement contained a general notice clause which allowed for notice to be hand delivered to the address of the seller set out in the agreement or faxed to the seller, and further identified the "Listing Broker" and the "Cooperating Broker" as agents of seller and Buyer, respectively, for notice purposes, although the court found that these terms were not accurately used in the documentation, noting that a single firm was broker‐agent for both parties.

The evidence indicated that the buyer left a copy of his written notice of waiver at the seller's front door (although he did not call the seller or knock on the door to ensure that seller would be there to receive it) and the buyer had also given a copy to his own real estate agent, who was with the same firm as the seller's agent.

The trial judge found, inter alia, that the specific clause in Schedule "A" required that notice of waiver be brought to the seller's personal attention and held that the agreement of purchase and sale, therefore, became null and void after no effective notice was delivered by the buyer prior to the deadline. The buyer appealed and the Court of Appeal agreed with the trial judge, citing the following reasons:

  • The Schedule "A" provision contained a specific notice requirement that was negotiated and prepared by the parties.
  • The plain language of Schedule "A" contemplated the actual delivery of waiver notice to the seller and there was no mention in Schedule "A" of the possibility of delivery to agents or to the seller's address, nor was there any reference in Schedule "A" to the general notice clause.
  • The context or circumstances surrounding the making of the agreement strongly suggested that the parties intended that any waiver notice must be brought to the seller's personal attention. The trial judge had found that in all matters of substance relating to the formation of the agreement, the parties dealt with each other directly and "the parties themselves drove the deal throughout formation, including Schedule "A"".
  • Schedule "A" was also prepared by the buyer's solicitor who "must be taken to have been aware of the different forms of notice provisions set out in the agreement".

The Court of Appeal disagreed with the buyer's argument that the dual agency role of the real estate firm allowed the effective delivery of the notice to be accomplished by the buyer delivering it to his own broker. Ultimately, the Court of Appeal focused on the words "delivered to the Seller" in Schedule "A" and agreed with the trial judge that notice of the waiver was only sufficient if brought to the seller's personal attention.

In light of McKee v. Montemarano and earlier cases dealing with these issues, parties would be well‐advised to consider the following:

Notice or No Notice?

At the outset, one needs to determine whether an affirmative step is required to waive a condition, or to put it another way: "what happens if nothing happens?" If an agreement is conditional until a specified time and the purchaser does nothing, will this mean that she has waived the condition? Or does the agreement automatically terminate? Alternatively, is the purchaser required to give notice that the condition is not waived or satisfied and, in the absence of such notice, the transaction will go firm?

Consider Your Verbs (and Delivery Methods): In the McKee case, the court was required to interpret the meaning of the phrase "delivered to the seller" in the context of the transaction. Ideally, parties to an agreement of purchase and sale will turn their minds to the issue and agree up front as to what will constitute effective notice, and the details can be included in the contract. For example, commercial agreements will now often include a provision that notices given to the parties' solicitors will be effective, and general notice clauses will typically describe the acceptable methods of delivery. However, in the McKee case, the general notice clause was overridden by the specific provision in Schedule "A" (the McKee agreement also included a provision that the added provisions, such as Schedule "A", supersede the pre‐set portions, like the general notice clause in the event of any conflict or discrepancy). Given the possibility that a fax machine may be off‐line or a party might not be available to receive personal delivery on the last day of a condition period, it is always helpful to obtain acknowledgement of receipt, if available, or to specifically confirm the form of evidence that will be sufficient for the sender to prove that notice was given.

Real Estate Agents: It may not be safe to assume that notice to a real estate agent is effective for waiving a condition after the agreement of purchase and sale has been signed. If parties want their agents to have authority for this purpose, this should be clearly expressed. The trial judge in McKee reviewed the case law on the issue and noted that an agent's authority to receive notice may arise from an express contract or from a course of conduct, or by the authority that a third party reasonably believes is invested in the broker, but the results of the cases will depend on the specific facts.

Write for Clarification: One can make efforts to avoid these situations through careful drafting but there may still be issues. For example, conditional dates might be defined as 30 days after a particular event, the date of which is not obvious. Or, we may need to review terms like "delivered to the seller", which will mean different things in different contexts. In any such case, it would be prudent to write a letter in advance of the deadline in an attempt to clarify potentially ambiguous terms and, if possible, obtain confirmation from the other party ("Yes, notice by fax to my lawyer at the following fax number is acceptable..."). Exchanging letters like this in advance of the deadline date would seem to be in the interest of all parties, as they have an opportunity to confirm their own intentions and expectations, rather than leaving an opening for future disputes. This course of action may be useful in other ways: if no reply is received to a reasonable request for clarification, this could be a warning that the other party may intend to use any ambiguity to its advantage, and steps could be taken to prepare for this.

As cases like McKee v. Montemarano illustrate, a failure to comply with notice and waiver requirements can have significant consequences. These provisions might seem like simple boilerplate clauses, but they should always be reviewed and confirmed or else parties may find themselves dealing with unintended results, which could include inadvertently committing to an unwanted transaction or terminating a good deal.


1 [2009] O.J. No. 1771 (QL); 78 R.P.R. (4th) 54 (Ont. C.A.), amended by [2009] O.J. No. 2641 (QL); 80 R.P.R. (4th) 324; affirming [2008] O.J. No. 2855 (QL), 72 R.P.R. (4th) 48 (Ont. S.C.)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions