Can a seller refuse to close if a condition was actually there to protect the buyer?

Generally, no — if a closing condition exists purely for the buyer's benefit, the seller usually can't refuse to close by pointing to that condition failing, because the seller isn't the party the condition was designed to protect. Purchase agreements typically make this explicit, stating which conditions are for the buyer's benefit, which are for the seller's, and which run both ways, precisely so this kind of dispute doesn't arise.

Where it gets more contested is a condition drafted ambiguously, without clearly stating whose benefit it exists for — that's exactly the kind of gap that produces a genuine disagreement at closing, since each side may have a real incentive to characterize the same condition differently depending on whether satisfying (or waiving) it works in their favour. A condition genuinely intended to run both ways — such as no material litigation affecting the deal generally — is different again, since either party may have standing to point to it.

Getting each closing condition clearly assigned to a benefiting party when the agreement is drafted avoids this fight entirely, which is exactly the kind of detail a Treadstone business lawyer checks for before signing.