A Residential Purchase Contract for a condominium in Canmore includes a clause stating the buyer must obtain a structural inspection report satisfactory to the buyer by a specific date. If the buyer terminates the contract because the inspection report reveals significant structural issues, what type of clause did the buyer exercise?

Question: A Residential Purchase Contract for a condominium in Canmore includes a clause stating the buyer must obtain a structural inspection report satisfactory to the buyer by a specific date. If the buyer terminates the contract because the inspection report reveals significant structural issues, what type of clause did the buyer exercise?

Answer options: ✅ A condition precedent, allowing termination if unsatisfied.

• A warranty, which would only lead to damages, not termination.
• A representation, not carrying legal weight for termination.
• A covenant, which binds both parties regardless of the outcome.

Correct answer: A condition precedent, allowing termination if unsatisfied.

Explanation: This is a condition precedent, as it is an uncertain future event that must occur before the parties are bound to perform the main obligations of the contract. If the condition is not fulfilled or waived, the contract can be terminated without penalty to the buyer, as articulated in standard Real Estate Purchase Contracts.