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Brian Madigan LL.B., Broker

RE/MAX West Realty Inc.,
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 

Phone: 416-745-2300

Cell: 647-404-8150 
Toll Free: 1-888-507-0817

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Classification of Contractual Terms

February 3, 2014 - Updated: February 3, 2014




There are three types of terms in an agreement:


  1. conditions,
  2. warranties, and
  3. representations.


With conditions, the remedy is that the agreement becomes null and void ab initio (from the beginning). They are “deal breakers”.


This is not the result with warranties and representations, where the remedy is only damages. The transaction must be completed, but there may be an abatement in the purchase price or damages to follow closing. The understanding with warranties is that the deal will go ahead.


Representations are statements believed to be true, but the Court may or may not award damages. It depends upon how serious they may happen to be.


Representations may also exist under the law of torts, and for serious misrepresentations there will likely be an award of damages.


There’s no such thing as a warranty in tort. It is a contract term.


The “entire agreement” clause seeks to limit representations to those included in the agreement, but the Courts have recently held that this clause does not have that effect.


Conditions and warranties are to be reproduced in writing as part of the agreement.


Representations may be found in the agreement but they can also be verbal.


That’s obviously dangerous. So, it is very important for agents, and vendors to be cautious about what they say to the buyers and their agents. The remedy here may be recission or termination of the agreement.


Brian Madigan LL.B., Broker



If you are buying or selling in the GTA, either residential or commercial properties, buying from a builder, investing in a condo, or just require general advice about the market, then please give me a call.

Tagged with: contract terms conditions warranties representations ontario law
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

Phone: 416-745-2300

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