What does irrevocable really mean?
By Hugh Hardy
Today I'd like to cover a topic that has "slipped through the cracks" - a question that I get asked from time to time, but haven't yet written about.
This popular question goes something like ... "what does 'irrevocable' mean with respect to an offer?" Well, the word "irrevocable" refers to "something that is not able to be revoked" - I think this is fairly obvious - if you take apart the word. Now, if we take a look at the Offer form, we would find a clause - clause #4 to be exact - which says: "Purchaser agrees that this Offer shall be irrevocable until...". But does irrevocable really mean that you can't withdraw the offer once it has been made? That is an interesting question and its been before the courts - so there are decisions which tell us how the courts see this question. Before I give that answer, let's consider a likely scenario...
You and I sit down to draft an offer on a property. We have signed an agreement to say that I represent you, the Purchaser. This means that you are my client (I mention this relationship because it is importantto the outcome of this example). Anyway, you sign the offer I and get into my car and drive to meet the Vendor and his/her agent. While I am in the car you page me and tell me that you have changed your mind and do not want the offer presented. Now let's assume for our example, that irrevocable really means that the offer cannot be revoked. How would things go? Well my interpretation of being paged in the car is this: if lam the Purchaser's agent, then I must withdraw the offer since I represent the interests of the Purchaser - and in actual fact, the offer has not been made at all yet. There is no offer, from a legal point of view, until the Vendor sees it. If this scenario were changed to be typical of earlier years - where all agents represented the Vendor - then I would have a duty to present the offer once signed. My interpretation here is that the offer is considered to be presented once it is signed and in my possession - after all, I am an extension of the Vendor. At this point, the irrevocable nature of the Offer would apply. But perhaps I am digressing a bit. So back to our example...
Let's say that the offer has not been withdrawn after all and I arrive at the Vendor's home (as the agent for the purchaser) where the Vendor and the listing agent are waiting. The offer is presented and considered. The Vendor says that he would like to think about the offer for a day. Since the offer is irrevocable until 11:59 P.M. the following day, this should be no problem. The next morning, the Purchaser calls to say that he has changed his mind and would like the offer withdrawn. Can this be done? If "irrevocable" really means what it says then indeed the offer cannot be withdrawn until it expires at midnight. The Vendor has the option of accepting the offer until that time - and the Purchaser must honour the Agreement should the Vendor decide to accept.
Now let's hear what the courts have to say about all his! Indeed, if an offer is irrevocable it means that the offer cannot be withdrawn for the time period specified. But courts have also said that the Offer must be "signed under seal" in order to establish it's irrevocability. Those little black circles on the back of the Offer form - the ones that have the word "seal" in brackets under them - are considered to be seals. In days of old, a seal was something made of wax and imprinted with a seal (thus the term "sealing wax"). These days it's just an ink smudge. But an important smudge all the same! At least that's how our legal system sees it.
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