The purchase offer for a property must be precise. Failing to be so, each party may interpret it in the way they wish to understand it.
The offer to purchase a property must be precise. If it is not, each party can interpret it in whichever way they have understood it.
Thus, a hotel owner wishing to sell their complex assigns a real estate broker for this purpose. Several months pass and the broker finds a buyer whose offer is duly accepted by the hotel owner. This offer is conditional on the verification of the financial statements for the past three years and an inspection of the property, to the satisfaction of the buyer, all within a fifteen-day period. The buyer, dissatisfied with the received financial statements, requests updated statements. The parties sign an amended offer delaying the signing of the deed of sale by 45 days and verbally agree that the updated statements will be provided to the buyer. As these were never given to the buyer, they refuse to sign the deed of sale and inform the broker that they are withdrawing their offer since the complex's income is $135,000 lower than what the broker presented.
Following this withdrawal, the broker claims their commission from the buyer, amounting to over $60,000, which the trial court awards them. The case is brought to appeal* and the court reverses the decision by specifying that the conditions stipulated in the offer were not met to the satisfaction of the buyer, who had the right to refuse to purchase and, as such, the broker cannot claim their commission that they would have been entitled to if the sale had taken place. The court justifies its decision by relying on two reasons:
- Firstly, even though the hotel owner provided the financial statements for the past three years, the offer stipulated that these had to be to the satisfaction of the buyer. Contrary to what the trial judge states, the buyer's satisfaction applied not only to the inspection of the property but also to the financial statements. The court reminds that the Quebec Civil Code provides that in interpreting a contract, one must always "take into account its nature and the circumstances in which it was concluded";
- Secondly, the case law is clear: if the deadlines are not strictly stipulated, a buyer is not obliged to sign within those provided in the offer to purchase. In this case, the mentioned deadlines for the signing of the deed of sale allowed the buyer to only sign if they declared themselves satisfied with the financial statements.
Even though "reading is always interpreting," writing well means ensuring that what we have written will be interpreted according to what we meant to say.
*CA 500-09-022522-122
