Contingency Clause
Learn about contingency clauses in Canadian real estate — what they are, common types, and why they protect buyers and sellers.
July 27, 2025
What is a Contingency Clause?
A contingency clause in real estate is a contract provision that makes the deal dependent on certain conditions being met, such as financing approval or inspection results.
Why Contingency Clauses Matter in Real Estate
In Canadian property transactions, contingencies protect buyers and sellers by setting clear conditions that must be satisfied for the deal to proceed.
Common contingencies:
- Financing approval
- Satisfactory home inspection
- Sale of buyer’s current home
Understanding contingency clauses helps manage risk and ensures clarity in negotiations.
Example of Contingency Clause in Action
The offer included a contingency clause making the purchase conditional on a satisfactory home inspection.
Key Takeaways
- Sets conditions for deal to proceed
- Protects parties in a transaction
- Common in offers to purchase
- Helps manage risk and expectations
- Must be clearly documented
September residential sales, not seasonally adjusted; the annual comparison uses CREA’s revised figures. Chart: 
Annual changes in the unadjusted national MLS® HPI and average sale price. The average is affected by the mix of transactions. Chart: 
Seasonally adjusted residential months of inventory by province. Local property types can differ substantially. Chart: 
Ontario and B.C. are the two provinces with forecast annual average-price declines in 2026. Chart: 
Annual average transaction prices in Canadian dollars. Forecast values are not December price targets. Chart: 
Five-year changes in seasonally adjusted composite MLS® HPI benchmarks, September 2021 to September 2026. Chart: 
