What Is an Escape Clause in an Ontario Real Estate Offer and How Does It Work?

An escape clause lets a seller keep selling a home that already has a conditional offer, while giving the first buyer a chance to firm up the deal. It is a term in the first, conditional Agreement of Purchase and Sale that requires the seller to notify the first buyer if the seller accepts another offer. The first buyer then has a short window to waive or fulfil their conditions, or the deal ends.

The seller can do this because a conditional offer does not bind the seller and the first buyer until every condition has been fulfilled or waived. If the first buyer meets the conditions, the seller must sell to that buyer on the original terms. If the first buyer cannot, and this is confirmed in writing, the first deal becomes null and void and the seller can go ahead with the second buyer.

The length of the window is set by your agreement, not by a statute, so read the wording closely. The second agreement should be conditional on the first one falling through, or the seller risks being bound to sell the same home to two buyers.