It’s no secret that the greater Vancouver housing market is an active one. However, given the number of transactions that were underway during the COVID-19 outbreak, it makes sense for contract-bearers to worry. A series of legal issues have risen, and continue to rise, regarding negotiating new transactions, transactions in progress, and lastly, transactions with binding contracts yet to close. Below, you’ll find some information regarding how you may be able to get out of your binding real estate contract.

Despite the law and COVID-19 constantly evolving, the team at Sodagar & Co. are still able to service your legal needs. During these uncertain times, it’s critical that you seek legal counsel to take the necessary precautions or make adjustments to your real estate-related actions. 

Can a Buyer Get Out of a Signed Contract?

In short, the answer is yes. However, set contingencies must be in place or a valid force majeure clause in the contract.


A signed contract is legally binding. At this point, the buyer would have provided an upfront deposit to the seller. If there are unmet contingencies, you are entitled to backing out of the contract and retrieving your deposit. 

Some home buyers might include contingencies concerning home inspection results, their ability to secure financing from their lender, selling their current home first, etc. Essentially, these contingencies act to legally protect and relieve you of your contractual obligations. This is especially useful in times of a pandemic such as COVID-19. With markets slowing down, meeting the financial requirements to follow-through with a purchase may no longer be possible. In addition, perhaps you are no longer able to sell your current home and cannot afford to keep both properties.

Evidently, having contingencies in place is quite valuable when entering real estate contracts. Be mindful of deadlines that might be outlined in the agreement as missing them may nullify the contingencies.

If you’re trying to back out of an agreement without contingencies, you risk losing more than just your deposit. You can also be liable for any ‘damages’ that the seller experiences. For example, if the seller must resell the property for less than the original amount, you may be responsible for paying the difference. This is true regardless if you are no longer able to afford the home because of changes to your employment.

Force Majeure

A force majeure clause absolves the liability of the non-performing party if it’s unable to perform its contractual obligations. However, the circumstances triggering the clause must be explicitly mentioned in the contract. For example, in the case of COVID-19, the contract should describe triggers such as pandemic or communicable disease. The event must also be unforeseeable, outside the control of either party, and make the obligations impossible to perform. Therefore, although a force majeure clause may help you get out of your real estate contract, meeting the requirements for its implementation is often difficult. Many real estate contracts lack any mention of these “acts of God” events; thus, this might be something to be mindful of prior to entering your next agreement.

In some cases the seller might let you back out of the contract due to the circumstances caused by COVID-19. Ultimately, the contract is rendered void under the doctrine of frustration.

What Measures Should I Take Before Signing?

As the article has outlined, it is important to spend time and resources into drafting a real estate contract. Be mindful of adding force majeure clauses as well as contingencies. In addition, having a lawyer review your contract to ensure enforceability may save you stress in the future.

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