The Ontario Superior Court’s recent decision in Ahmad v. Ain, 2025 ONSC 4017, serves as a stark reminder that firm, unconditional real estate agreements mean exactly what they say. For transactional lawyers, this case offers valuable insights into damages calculations, mitigation obligations, and the limits of accommodation in real estate transactions.
The Facts: A Straightforward Breach with Costly Consequences
The case involved a seemingly routine residential purchase in Bradford West Gwillimbury. Qura Tul Ain agreed to purchase Ammar Ahmed’s home for $1.45 million under a firm agreement with no conditions and a “time is of the essence” clause. The original closing date of April 28, 2022 was extended twice at the purchaser’s request—first to May 5, then to May 27, 2022.
On May 26, 2022, one day before the final extended closing date, Ain’s agent advised that she would not be completing the purchase. Her reason? The sale of her own home had fallen through when her buyer couldn’t secure financing, leaving her unable to fund the Ahmed purchase.
The Court’s Analysis: No Sympathy for Self-Created Problems
Justice Parghi was unequivocal in finding Ain liable for breach of contract. The court rejected her argument that Ahmed should have accommodated her further by offering additional extensions or reducing the purchase price. Key findings included:
- Firm means firm: The agreement contained no conditions precedent relating to financing or the sale of Ain’s existing home
- No obligation to extend: While Ahmed had voluntarily extended the closing twice, he was under no legal obligation to do so again
- Foreseeability irrelevant: Even if Ahmed knew about Ain’s house sale dependency, this created no legal obligation to accommodate her
The court cited established precedent that vendors may, absent bad faith, insist on compliance with agreed terms, referencing Zoleta v. Singh and RE/MAX Twin City Realty, 2023 ONSC 5898.
Damages: A Comprehensive $386,460 Award
Also instructive for practitioners is the court’s detailed damages analysis. Ahmed was awarded $386,460.60, broken down as follows:
Awarded Damages:
- Difference in sale price: $350,000 (sold for $1.1M vs. original $1.45M)
- Carrying costs for 153 days: $11,816.90 (mortgage payments, insurance, utilities, property taxes)
- Necessary repairs: $8,136.00 (required by second purchaser’s inspection)
- Legal fees for resale: $1,362.95
- Texas apartment rent: $15,144.75 (unable to purchase home without sale proceeds)
Rejected Claims:
- Moving costs to Texas: $27,028 (would have been incurred regardless of breach)
- Real estate commission on resale: Would have paid commission on original sale anyway
Critical Takeaways for Transaction Lawyers
- The Damages Clock Matters
The court calculated carrying costs from the final extended closing date (May 27), not the original date (April 28). This reduced Ahmed’s carrying cost claim by 29 days, demonstrating the importance of clear extension documentation.
- Mitigation Must Be Reasonable, Not Perfect
Ain criticized Ahmed for taking over a month to re-list after her breach. The court found this reasonable given Ahmed’s recent move to Texas and need to secure new representation. The property sold after 53 days on the market following two price reductions.
- Expectation vs. Reliance Damages
The court’s rejection of moving costs illustrates the difference between expectation damages and reliance damages. Expectation damages are designed to put the plaintiff in the position they would have been in if the contract had been performed. Reliance damages seek to recover wasted expenditures that were incurred in reliance on the other party performing the contract. In this situation, awarding reliance damages in addition to expectation damages “would amount to double recovery and would put Mr. Ahmed in a better position than he would have been in had the contract been performed.” The court found that the moving costs would have been incurred regardless of the breach. Hence, the moving costs were not recoverable.
- Secondary Accommodation Costs Are Recoverable
Interestingly, the court awarded rental costs in Texas, finding it reasonably foreseeable that Ahmed would need temporary accommodation without sale proceeds. This aligns with established caselaw, such as Bonner v Gill, 2024 ONSC 3270 and Falcone v. Primont Homes (Maple) Inc., 2006 CanLII 40991.
Brokerage Liability: A Clean Win
Ahmed’s agent, Amatul Waheed of Re/Max Premier, faced a crossclaim alleging conspiracy, breach of fiduciary duty, and failure to include “mandatory” financing conditions. The court dismissed all claims, noting:
- No evidence of bad faith or conflict of interest
- No legal requirement for financing conditions in purchase agreements
- Ain’s failure to provide expert evidence on professional negligence standards
Practical Implications
This decision reinforces several key principles for transactional practitioners:
- Draft clearly: Ensure extension agreements specify their impact on damages calculations
- Counsel clients properly: Buyers must understand that firm offers create absolute obligations
- Document instructions: Maintain clear records when clients reject standard protective conditions
- Set realistic expectations: Vendors accommodating extensions assume no ongoing obligation to continue doing so
Ahmad v. Ain ultimately demonstrates that while the law permits commercial accommodation and flexibility in real estate transactions, it does not require it. When parties agree to firm, unconditional terms, courts will enforce them—even when the consequences prove financially devastating.
For transactional lawyers, the message is clear: ensure clients fully understand what “firm” means before they sign, because the courts certainly do.
