They paid a second deposit, demonstrating their intent to proceed with the agreement: court
The Court of Appeal for Ontario dismissed an appeal from a couple who failed to complete the purchase of an under-construction home in Exeter, Ontario, affirming that the agreement of purchase and sale was binding.
The court also upheld the lower court's ruling that the couple was liable for damages to the builder for breaching the contract.
In January 2022, the appellants signed an agreement to purchase the home from the respondent, VanderMolen Homes Inc., for $937,400. They paid a $5,000 deposit and later waived conditions, paying a second deposit of $88,740. The parties scheduled the purchase to close on August 31, 2022.
In May and June 2022, the builder contacted the appellants about design selections but received no response. In August, the builder contacted the appellants about a pre-delivery inspection, which they cancelled. Days later, their lawyer informed the builder they would not complete the purchase, and the builder eventually sold the home to a third party for $705,000, incurring additional carrying costs.
The builder sought damages in a summary judgment motion, claiming the price difference, property taxes, and utilities minus the deposits. The motion judge found the appellants breached the agreement and awarded $142,757.89 in damages.
The appellants argued that the contract was not binding because the builder missed a deadline to accept an extension offer, which contained a "time is of the essence" clause. They also claimed the judge erred in considering their conduct after the missed deadline.
The Court of Appeal rejected these arguments, finding the appellants failed to treat the agreement as void. Despite the missed deadline, the appellants waived conditions and paid the second deposit, demonstrating their intent to proceed with the agreement. The court affirmed that the contract became binding on January 26, 2022, when the appellants fulfilled these obligations.
The court also found the appellants' conduct supported the conclusion that the agreement was still in effect, including their lawyer's request in August 2022 for the builder to list the property to minimize damages. Ultimately, the court upheld the damages award and dismissed the appeal.
