Have you ever just trusted or assumed a Realtor would put the right clauses & conditions in your offer to buy a house or condo?

What is the difference between clauses, terms & conditions and is it important for you to know?

When you make an offer to buy a house or condo your offer is a legal contract and legally binding in different ways. 

So it’s important for you to know the distinction.  

Although people use the words “clauses”, “terms”, and “conditions interchangeably, some protect you while others can make you liable for costs. 

Here are the key differences between Clauses, Conditions, & Terms. 


Clauses are requirements a Buyer or Seller must agree to as part of the transaction. 

Depending on the clause and the wording, it might be something a Seller (for example) might undertake to do prior to the closing date of the sale. 

Or something relevant to the closing date of the sale.

Or something that survives the closing date of the sale (which means it remains in effect after the closing date). 

An example is: “The Seller agrees to provide the Property with the Exterior and Interior of the Property in a Clean, Trash Free, and Broom Swept condition”. 

In this example if the Buyer gets the keys and finds unwanted old broken sofas and furniture, etc in the living room, then the Buyer might have grounds to sue the other party. 

Another one is: “The Seller represents and warrants that the fixtures, chattels, furniture and appliances included in this Agreement will be in good working order, and free from all liens and encumbrances upon completion.” 

If a Buyer gets the keys and the washer & dryer or the stove are non-functional, they might have recourse, instead of having to pay thousands of dollars to buy replacements. 


Conditions can be another component to a Purchase & Sale Agreement. 

They’re called “conditions” because the Purchase & Sale Agreement isn’t final until those “Conditions” are fulfilled by the required party (Buyer or Seller). 

Conditions must have a specified date in which that condition must be fulfilled or waived. 

When that specific date is reached there is a mandatory [next] step that must occur. 

The Buyer (or Seller) who inserted that Condition in the Purchase & Sale Agreement must either;

  1. Sign a Notice of Fulfilment that the Condition has been fulfilled,
  2. Sign a Waiver which means they are removing that Condition so the Purchase & Sale Agreement is no longer Conditional on that Condition, 
  3. Sign a Mutual Release which basically releases both parties from the Purchase & Sale Agreement and the Agreement becomes null & void. 

The most popular examples of Conditions are those for Buyers. 

eg. Conditional upon Buyer getting Financing (mortgage approval) or Conditional upon Inspection of the property by a home Inspector. 

If there is a Condition on Financing & Inspection (for example) for 5 days, it means the Seller has agreed to accept the Buyer’s offer and can’t accept any other offers. 

They have a binding Purchase & Sale Agreement.

However it’s not final until one of the previous 3 criteria are met. 

If the Buyer does not get financing approval or is not satisfied with the home inspection, then the Buyer (in this example) can get out of the deal without penalty. 

So if the Buyer (in this example) submits a Notice of Fulfillment or Waiver at any time within the Conditional period or up to the end of the Conditional period, then the Purchase & Sale Agreement is now final and binding. 

If the Buyer (in this example) submits a Mutual Release and the Seller signs it then they agree to let each other out of the deal.

The Seller can now sell the property to someone else. 


Finally, there are “terms” in a Purchase & Sale Agreement. 

Terms, are other important details which form the Agreement.

They’re usually criteria that can be negotiated, but must be agreed upon. 

Examples of “terms” are the actual closing date of the sale/purchase or the amount of the “deposit”. 

If you want to know the difference between a “deposit” vs. “downpayment” check out my post called: 

“downpayment” vs. “deposit” When Buying a Home which explains a very important distinction. 

If you want to know more about buying or selling a home I’m always happy to chat and answer all of your questions.