Can a seller demand to be notified of a claim within a set number of days or lose the right to defend it?

Yes, and notice provisions of exactly this kind are standard in Ontario purchase agreements. A seller reasonably wants to know about a potential claim promptly, particularly for a third-party claim, so it has a real opportunity to participate in or control the response before decisions are made without its input, and purchase agreements commonly set a specific number of days within which the buyer must give written notice of a claim, describing its nature and, where possible, the estimated amount involved.

What happens if the buyer misses that deadline depends on the specific wording used. Some agreements treat timely notice as a strict condition, meaning late notice can bar the claim outright regardless of prejudice to the seller, while others only reduce or bar the claim to the extent the seller was actually prejudiced by the delay, which is a meaningfully more forgiving standard for a buyer who is a few days late. Buyers should treat notice deadlines as a real, calendar-driven obligation rather than an afterthought, since missing one can jeopardize an otherwise valid claim depending on how strictly the clause is written.