An Agreement of Purchase and Sale for a commercial property contains a condition precedent for the buyer to obtain necessary zoning approvals for their intended use within 60 days. Just before the 60-day expiry, the buyer realized they missed a critical municipal application deadline and cannot possibly obtain the approvals within the timeframe. Neither party has provided notice to the other regarding the condition. What is the most likely legal outcome at the end of the 60-day period if no action is taken?

Question: An Agreement of Purchase and Sale for a commercial property contains a condition precedent for the buyer to obtain necessary zoning approvals for their intended use within 60 days. Just before the 60-day expiry, the buyer realized they missed a critical municipal application deadline and cannot possibly obtain the approvals within the timeframe. Neither party has provided notice to the other regarding the condition. What is the most likely legal outcome at the end of the 60-day period if no action is taken?

Answer options: ✅ The agreement automatically terminates because the condition precedent was not fulfilled or waived by the specified deadline.

• The agreement remains valid, but the buyer is in breach due to their failure to obtain the zoning approvals.
• The agreement becomes firm and binding, as the condition was for the sole benefit of the buyer, who implicitly waived it by inaction.
• The parties must negotiate an extension, otherwise, the party who was meant to benefit from the condition can sue for specific performance.

Correct answer: The agreement automatically terminates because the condition precedent was not fulfilled or waived by the specified deadline.

Explanation: When a condition precedent, which is for the benefit of both parties or the agreement itself, is not fulfilled or waived by the stipulated deadline, the agreement typically automatically terminates at the expiry of that period. Unlike conditions solely for the benefit of one party that can be waived, conditions precedent integral to the contract's viability, without fulfillment, render the contract void.