This post is about a clause in the Ontario OREA version of the Agreement of Purchase and Sale. We are specifically talking about Form 100 or 101 that has been revised in 2025. We are planning a series about various parts of the OREA contract, so stay tuned for the next one.
In Ontario, the Agreement of Purchase and Sale (APS) is the foundational contract in a residential real estate transaction. One of its key clauses is the irrevocability clause, which sets out the time period during which the offer (or counter-offer) cannot be withdrawn by the party making it. This means that once an offer is signed and submitted with a specified irrevocable deadline, the offeror is legally bound to leave that offer open until the specified time, even if they change their mind. Understanding this clause is critical, as it can significantly influence negotiation power, deal certainty, and strategy.
The main effect of the irrevocability clause is that it provides the recipient (typically the seller) with a binding window to accept the offer. During this period, the buyer cannot revoke or amend the offer unless the seller rejects or counter-offers first. If the seller signs and accepts within the irrevocable period, a binding contract is formed. However, if the seller tries to accept after the deadline has passed, the original offer becomes void and cannot be enforced unless the buyer agrees to re-affirm it. This protects both parties from last-minute reversals and creates predictability in the transaction process.
An example of how irrevocability can benefit a buyer is during a competitive offer situation. By setting a short irrevocability period—say, a few hours—the buyer can pressure the seller to make a quick decision, potentially limiting the seller’s ability to entertain multiple offers or delay for a bidding war. This can give the buyer a strategic edge in securing the property without facing an escalation in price or terms.
On the flip side, irrevocability can hurt a buyer if they later find a better property or experience a sudden change in circumstances—such as financing concerns or discovering a major issue with the home that wasn’t previously known. If the irrevocable deadline hasn’t passed and the seller accepts the offer, the buyer is legally bound to proceed, even if they’ve changed their mind. This could result in legal consequences if the buyer tries to back out, including loss of deposit or being sued for damages. Real estate agents may recommend tailoring the length of irrevocability carefully to align with the buyer’s strategy and market conditions.
While the irrevocability clause in an APS may seem like a minor administrative detail, it carries significant legal and practical weight in Ontario real estate transactions. Buyers, and Sellers, must understand that once an offer is made with a set irrevocability period, they are committed until that time expires. Working closely with a real estate professional and lawyer can help ensure that the irrevocability period is used strategically to maximize the buyer’s chances and minimize risk.
The content on this post is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship.