Will You Need a Lawyer’s Help With an Unconscionable Real Estate Contract?
An unconscionable contract is a contract that is so unfair or so one-sided that it shocks the conscience. If you are dealing with an unconscionable real estate contract in Ontario, you should make an appointment at once to discuss that contract with a Toronto real estate lawyer.
What, specifically, can make a real estate contract unconscionable? What are your legal rights as the buyer or as the seller in an Ontario real estate transaction? When will you require the advice and services of an Ontario real estate lawyer?
If you’ll keep reading this short discussion of real estate transactions, unconscionable contracts, and your rights under Ontario law, you will find the answers you may need.
When is a Contract Unconscionable?
A contract may be unconscionable for any of these reasons: one party had undue influence over the other party; the parties had unequal bargaining power; one party signed the contract while under duress; or one party surprised the other with unfamiliar terms or changes to the contract:
- Undue influence happens when one party to a contract aggressively pressures the second party to sign the contract. The use of undue influence by one party over the second party puts the free will of the second party into question.
- Duress can happen if one party to a contract threatens the second party. The threat may be verbal or physical, including threats to injure or harm the other party and his or her family, friends, or best interests.
- Unequal bargaining power can occur if one party to a contract has an advantage over the second party due to knowledge, age, or experience.
- Surprise happens when one party to a contract includes terms in the contract that are unknown to the second party. This may include technical jargon, details in small print, or even adding terms and provisions to the contract after the second party has signed it.
How Should You Handle an Unconscionable Real Estate Contract?
Unconscionability is a defense in a breach of contract claim. If one party files a breach of contract claim against a second party for failing to perform under the contract, the second party may claim that the entire contract or several terms in the contract are unconscionably oppressive.
If you believe that you are being asked to sign an unconscionable real estate contract, or if you’ve already signed a contract that you have come to believe is unconscionable, schedule a consultation as quickly as possible to discuss the matter with a Toronto real estate lawyer.
A real estate lawyer will help you determine if a real estate contract is in fact unconscionable and will explain your options for dealing with such a contract. Those options include renegotiating the contract or filing a breach of contract claim against the other party to the contract.
How Do the Courts Handle Unconscionable Real Estate Contracts?
A court has several options if it determines that a contract or a contract’s terms are unconscionable. These options include voiding the contract, voiding the unconscionable terms in the contract, or having the unconscionable terms in the contract modified:
- If a court determines that a contract is entirely unconscionable, that court will void the full contract. In such cases, both parties are freed from any responsibility to perform under the contract.
- If a court decides that only specific terms of the contract are unconscionable and must be voided, those terms will be removed, and the terms that remain in the contract are enforceable.
- If a court tells the parties to revise a contract’s unconscionable terms, after that revision, the contract will be enforceable.
When Should You Contact a Real Estate Lawyer?
The stakes may be high in a property transaction, and the laws are complicated. Ontario law requires you to have a lawyer’s advice and services when you buy or sell real estate. If a dispute over a real estate contract emerges, your Ontario real estate lawyer will work to resolve it.
A real estate lawyer will protect your rights and tell you if a real estate contract’s terms (or an entire contract) may be considered unconscionable. It is important to spot an unconscionable contract before you sign it. Getting out of a contract after you’ve signed the contract is not easy.
When you’ve had the time and the information you need to consider a contract carefully, it may be difficult to prove to a court that you signed the contract because of undue influence, because you were under duress, or because you did not have equal bargaining power with the other party.
What is a Real Estate Lawyer’s Role?
When you buy or sell real estate, a real estate lawyer will help you determine if a contract is unconscionable, and a lawyer will help you deal with any title defects or any other legal problems that may arise with a transaction.
Your lawyer will review every document that is part of the transaction, make sure that the transaction and your own actions comply with the law, and warn you against any actions that may put your best interests at risk.
Whether you are the buyer or the seller in a real estate dispute, you must be represented by a lawyer who has considerable experience advocating for clients – and prevailing on their behalf – in real estate cases.
How Are Real Estate Disputes Resolved?
Legal action isn’t the way that most real estate disputes are resolved in Ontario. Most real estate disputes are settled through arbitration, through mediation, or through private, out-of-court negotiations.
However, if a dispute over a real estate contract can’t be resolved privately, an Ontario court will resolve it. If you buy or sell property in the Toronto area, you must have the right real estate lawyer scrutinize the pertinent documents and protect your rights and interests.
At Financial Litigation, we help property buyers and sellers resolve their real estate disputes. A lawyer at Financial Litigation will bring your real estate dispute to its best possible outcome, and if necessary, we will take your claim to court and advocate there on your behalf.
If you are involved in any type of real estate dispute in or near the Toronto area, promptly schedule a consultation with a real estate lawyer at the offices of Financial Litigation by calling 416-769-4107. Our legal team is ready to work on your behalf.