Humber/Ontario Real Estate Course 1 Exam Practice

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If a property used for illegal activities is sold, and then the buyer wants to cancel the agreement, what is the legal status of this agreement?

  1. The seller has a strong legal position due to the enforceable contract

  2. The buyer can reduce the price substantially due to imminent legal issues

  3. The agreement is unenforceable as it lacks a lawful object

  4. Both parties must mutually agree to cancel the contract legally

  5. The seller cannot take legal action until the buyer breaches the agreement

  6. The agreement will be upheld by law despite the illegal activities

The correct answer is: The agreement is unenforceable as it lacks a lawful object

When a property is used for illegal activities and then sold, the agreement is considered unenforceable because it lacks a lawful object. In legal terms, for a contract to be valid and enforceable, it must have a lawful purpose. In this scenario, since the property was being used for illegal activities, the agreement to sell it would be deemed unenforceable as it goes against the law. Therefore, option C is the correct choice. The other options are incorrect because they do not align with the legal principle that contracts must have a legal and valid purpose to be enforceable.

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