Definition : Preliminary contract (promise to purchase) - Indemnity

An amount paid by a promisor-purchaser to terminate a preliminary contract. When a preliminary contract provides for an indemnity in the case of the exercise of the right to withdraw, this indemnity may not exceed 0.5% of the agreed sale’s price.

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The signing of the preliminary contract binds the parties, (yourself, the developer or builder). This being said, the Civil Code of Quebec provides that you have the right within a period of 10 days to unilaterally cancel this contract, which means that you can walk away from your undertaking to purchase (right of withdrawal) without any justification. This "right of withdrawal" may be exercised by any promisor who is a natural person and who intends to occupy the apartment being the object of the preliminary contract.
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The preliminary contract is signed before the purchase of a new or to be built property. To be enforceable, a preliminary contract must, contain the designation of the parties, the identification of the targeted immovable and the price offered.
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