Residential BrokerageChapter 2 · 32 practice questions

Chapter 2: Promise to Purchase

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Overview of the Chapter

This chapter examines the legal and professional framework governing the promise to purchase (also known as an offer to purchase or purchase offer) for immovable property in Quebec. The promise to purchase is the foundational document in a real estate transaction, through which a buyer expresses their intent to acquire a property under specific terms. The chapter covers the form and validity requirements, the legal nature of the promise as a unilateral contract, the role of suspensive conditions, the irrevocability period, the effect of counter-proposals, the obligations of the broker in presenting offers, and the required documents and timelines following acceptance. Understanding these elements is essential for real estate agents and brokers to properly draft, present, and manage purchase offers while protecting the interests of all parties and complying with the Civil Code of Quebec and regulatory requirements.

Key Concepts Explained in Detail

PROMISE TO PURCHASE — TRANSACTION FLOW 1. OFFER CREATION Buyer submits Promise to Purchase with price, terms & conditions (QC-RES Form) EARNEST DEPOSIT Held in trust account by broker / notary BUYER Promisee / Obligee SELLER Promisor / Obligor Offer Acceptance 2. ACCEPTANCE Seller accepts or counter-offers Deadline for acceptance specified in offer 3. CONDITIONS & TIMELINES • Inspection period (7-10 days) • Financing condition • Certificate of Location • Title search & insurance 4. CLOSING Deed transfer & payment Adjustments & final statement Registration at land office KEY LEGAL PRINCIPLES • Promise to Purchase = preliminary contract • Creates legal obligation to negotiate in good faith • Not a final deed of sale until conditions fulfilled • Revocation: possible before acceptance • Breach: remedies include damages • Specific performance may be available OFFER NEGOTIATION CLOSING Module QC-RES

Form and Validity of the Promise to Purchase

A promise to purchase an immovable must be made in writing to be valid under article 1396 of the Civil Code of Quebec. A verbal promise has no legal effect. This requirement ensures clarity and enforceability given the significant value of real estate transactions. The promise must be signed by the buyer (the promisor) and must identify the property, the price, and any other essential terms.

Legal Nature: Unilateral vs. Bilateral Promise

From Unilateral Promise to Bilateral Contract From Unilateral Promise to Bilateral Contract PHASE 1 — BEFORE ACCEPTANCE BUYER (PROMISOR) • Commits to purchase • Irrevocable offer • Bound by the promise • Cannot revoke alone (art. 1393, 1395, 1396 C.c.Q.) SELLER (BENEFICIARY) • Holds an option • May accept or refuse • Fixed period to decide • No obligation before acceptance Option period PHASE 2 — AFTER ACCEPTANCE SYNALLAGMATIC PROMISE (bilateral contract) ✓ Both parties are bound • Buyer: must purchase • Seller: must sell Suspensive conditions • Satisfactory inspection • Financing obtained • Sale of current property If conditions not met: ✗ Promise annulled ✗ Without compensation UNCONDITIONAL ACCEPTANCE "Accepted as is" COUNTER-OFFER Any modification = refusal of the initial offer New offer from the seller If modified The buyer may accept, refuse or counter-offer Civil Code of Quebec — art. 1393, 1395, 1396 | Formation of the real estate sales contract

Before acceptance by the seller, a promise to purchase is a unilateral contract. Only the buyer undertakes an obligation—to purchase under the stated conditions—while the seller merely benefits from an option to accept the offer. The buyer is irrevocably bound for the duration of the option period. Once the seller accepts the promise unconditionally, the promise becomes a bilateral (synallagmatic) contract, creating reciprocal obligations: the buyer agrees to buy, and the seller agrees to sell, subject to any remaining suspensive conditions.

Irrevocability of the Promise

Irrevocability and the Option Period IRREVOCABILITY AND THE OPTION PERIOD STEP 1 Promise to purchase signed by the buyer OPTION PERIOD Date and time limit for acceptance by the seller Ex.: 5 p.m., on the 15th of the month STEP 2 Seller's acceptance "Accepted as is" 🔒 BUYER'S IRREVOCABILITY • The buyer cannot withdraw their offer • No unilateral revocation possible • Even by phone or other means • Protection of the seller's reliance 🔒 ⚖️ LEGAL EFFECT • The seller can accept with confidence • The offer is guaranteed until expiry • Transformation into a bilateral contract • After acceptance → synallagmatic promise LEGAL REFERENCES Art. 1393, 1395, 1396 C.c.Q. — Written promise to purchase, counter-offer, survival upon death Timeline: Signature → Option period (irrevocable) → Acceptance → Bilateral contract

The promise to purchase is irrevocable from the moment it is communicated to the seller (or the seller’s broker) for the entire option period. The buyer cannot unilaterally revoke it before the expiry of the stipulated timeframe, even by telephone or other means. This rule gives the seller certainty during the decision period.

The Time Extension Clause (Option Period)

The promise must include a term (the extension or option period) during which the seller may accept it. This period is an essential component of the unilateral offer. If no timeframe is stated, the offer may lapse after a reasonable time, but standard practice requires a specific deadline (e.g., “valid until 5:00 p.m. on March 10”).

Suspensive Conditions

Suspensive conditions are future and uncertain events that, if not fulfilled, render the promise void without penalty for either party. Common conditions include:

  • Financing condition: The buyer must obtain a mortgage loan within a specified period.
  • Inspection condition: The buyer must be satisfied with the results of a property inspection.
  • Sale of the buyer’s own property: The promise is conditional on the sale of another immovable owned by the buyer.

These conditions must be fulfilled within the time stipulated in the promise. If a condition is not met—and the non-fulfillment is not attributable to the buyer who could have waived it—the promise is annulled without compensation. The promise forms an indivisible whole: failure of one suspensive condition voids the entire offer, even if other conditions have been fulfilled or waived.

Waiver of Conditions

The buyer may waive a suspensive condition (e.g., by waiving the inspection). However, waiver is effective only if done in writing within the time limit. If the buyer fails to act (e.g., does not notify the seller of financing refusal), the condition is deemed unfulfilled, and the promise is annulled.

Counter-Proposal by the Seller

Counter-Proposal: The Initial Offer Is Extinguished Counter-Proposal: The Initial Offer Is Extinguished Art. 1393 C.c.Q. — Any modification by the seller = refusal of the initial offer + new offer INITIAL OFFER Purchase promise Buyer = offeror Seller = beneficiary Signature SELLER Receives the offer May accept, refuse or modify MODIFICATION Price, inclusions, date, legal warranty, etc. Signs with modifications INITIAL OFFER EXTINGUISHED Refusal of the initial offer (art. 1393 C.c.Q.) COUNTER-PROPOSAL New offer from the seller Seller becomes offeror = new offer REVERSED ROLES Seller = new offeror Buyer = beneficiary who decides to accept, refuse or counter-propose BUYER'S DECISION ✓ Acceptance Bilateral contract (accepted promise) ✕ Refusal End of negotiations ↻ Counter-proposal New negotiation cycle The buyer decides Important: Any attempt to accept the initial offer after a counter-proposal is without effect. The initial offer is extinguished — only the seller's counter-proposal is at stake.

When the seller changes any term of the promise (e.g., price, inclusions, exclusions of legal warranty) and signs the document as “accepted as per the following modifications,” this constitutes a counter-proposal. According to article 1393 C.c.Q., a counter-proposal is a refusal of the initial offer and creates a new offer. The original promise to purchase is extinguished, and the seller becomes the offeror. The roles are reversed: the seller now awaits the buyer’s acceptance or further negotiation.

Acceptance “As Is”

If the seller signs the promise without any modifications (e.g., writes “accepted as is”), the promise transforms into a bilateral promise to purchase and sell, binding both parties subject to any remaining suspensive conditions. This unconditional acceptance perfects the agreement.

Death or Incapacity of the Buyer

Death or Incapacity of the Buyer: The Promise Survives Death or Incapacity of the Buyer: The Promise Survives Article 1395 C.c.Q. — The promise to purchase survives the death or incapacity of the promising buyer UNILATERAL PROMISE TO PURCHASE Option period ongoing — seller may accept ⚠ EVENT Death or incapacity Signing of promise Death / incapacity Seller's acceptance Bilateral promise ✓ RULE: THE PROMISE SURVIVES The promise binds the estate or the legal representative of the buyer. The seller may still accept it. ✓ CONVENTIONAL EXCEPTION The contract may provide EXPRESSLY to the contrary. Explicit non-survival clause. ✓ LEGAL BASIS Reinforces the irrevocable nature of the unilateral promise — protects the seller. Survival of the promise Triggering event Possible exception Bilateral contract

Under article 1395 C.c.Q., a promise to purchase survives the death or incapacity of the buyer, unless the contract expressly provides otherwise. The buyer’s estate is bound by the promise, and the seller may still accept it during the option period. This reinforces the irrevocable nature of the unilateral promise.

Modifications After Acceptance

Any change to the accepted promise must be documented in writing using the mandatory modification form (OACIQ form), signed by both parties. Verbal or informal modifications are not valid.

Delivery of Documents After Acceptance

Document Delivery Within 7 Days of Acceptance Document Delivery Within 7 Days of Acceptance Clause 4.1 of the promise to purchase form — 7-day period after acceptance STEP 1 Acceptance of the promise to purchase STEP 2 7-day period to deliver the documents STEP 3 Delivery of required documents to the seller STEP 4 Review by the buyer 🏠 SINGLE-FAMILY HOME Up-to-date location certificate Document attesting to the legal status of the land and buildings No other mandatory documents for this type of building 🏢 DIVIDED CO-OWNERSHIP Declaration of co-ownership Building bylaws Financial statements of the syndicate Minutes of meetings ✗ Location certificate NOT required ⏱ REVIEW PERIOD FOR THE BUYER The buyer may examine the documents and, if major irregularities are revealed, may invoke a condition or warranty — or withdraw without penalty. Source: Civil Code of Quebec, mandatory promise to purchase form — OACIQ | Real estate brokerage training

The mandatory promise to purchase form (OACIQ) establishes specific obligations regarding document delivery within 7 days of acceptance (unless otherwise stipulated):

  • For a single-family home or multiplex: The seller must deliver a certificate of location drawn up within the last 5 years (or an older one, depending on the form’s provisions).
  • For a divided co-ownership (condominium): The seller does not deliver a certificate of location. Instead, they must provide the declaration of co-ownership, building bylaws, financial statements, and other relevant documents.
  • For an undivided co-ownership: No certificate of location delivery is required either.

The buyer must then exercise their right to examine these documents within a stipulated period (typically 7 days).

Important Regulations, Procedures, and Code of Ethics Provisions

OACIQ Mandatory Forms

All promises to purchase for immovable properties in Quebec are subject to mandatory forms prescribed by the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ). These forms include standard clauses for conditions, timelines, and representations. Agents and brokers must use these forms without unauthorized modifications.

Broker’s Obligation to Present All Offers

When a listing broker receives multiple purchase offers on the same property, they must submit all offers to the seller objectively, without favoring any one offer. The broker must present each offer promptly to allow the seller to make an informed decision. The broker may not disclose the existence of another promise to purchase to a buyer without the seller’s written authorization. This confidentiality preserves the integrity of the negotiation process.

Exclusion of the Legal Warranty

The legal warranty of quality (article 1726 C.c.Q.) applies automatically to all sales of immovable property. To exclude it, the seller must insert an express clause in the promise to purchase. A counter-proposal that contains such an exclusion is a valid method to integrate the waiver into the agreement. Simple acceptance of a promise that does not mention the exclusion does not waive the warranty.

Suspensive Conditions: Good Faith and Diligence

The buyer must act in good faith to fulfill suspensive conditions. For example, with a financing condition, the buyer must make reasonable efforts to obtain a loan. If the buyer fails to fulfill a condition due to their own fault (e.g., not applying for a loan), they may be liable for damages. Similarly, if the buyer obtains financing but simply changes their mind, they cannot invoke non-fulfillment.

The Promise as an Indivisible Whole

Each clause of the promise is interdependent. If one suspensive condition cannot be fulfilled, the entire agreement collapses. This means a buyer who has waived the inspection condition may nevertheless withdraw if the financing condition fails.

Common Relationships Between Concepts

  • Unilateral promise → Bilateral promise: A promise to purchase starts as unilateral (buyer bound, seller free) and becomes bilateral only upon seller’s unconditional acceptance. The irrevocability binds the buyer during the option period.
  • Suspensive conditions → Annulment: Conditions protect both parties. Non-fulfillment automatically annuls the promise, unless a party has waived the condition or caused the failure.
  • Counter-proposal → Extinction of original offer: Any modification by the seller kills the original promise and creates a new offer. The roles of offeror and offeree swap.
  • Exclusion of legal warranty → Express writing: The warranty is excluded only by an explicit clause in the promise or counter-proposal. Silence or simple acceptance does not exclude it.
  • Broker’s duty to present offers → Confidentiality: The broker must present all offers but cannot disclose one buyer’s offer to another without the seller’s permission.
  • Document delivery → Right of examination: The seller must deliver co-ownership or location documents within 7 days, and the buyer then has a period to review them and possibly withdraw if the documents reveal issues (subject to specific conditions and warranties).

Mastery of these concepts enables real estate professionals to draft valid promises, navigate negotiations ethically, and ensure compliance with the Civil Code of Quebec and OACIQ regulations.

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