In the recent Court of Appeal ruling of 10443204 Canada Inc. v. 2701835 Ontario Inc., 2022 ONCA 745, the Court of Appeal clarified that entire agreement clauses in contracts do not shield any representor or deprive any party to a contract from remedies available for a fraudulent misrepresentation. Background In May of 2019 the appellant Chirag Patel and his corporation 2701835 Ontario Inc. (the appellants) entered into a purchase agreement (the “APS”) with the respondent 10443204 Canada Inc. (the respondent), related to the purchase of a coin laundry business located in Brampton. The APS contained an entire agreement clause of which the relevant part indicated: “There is no representation, warranty, collateral agreement or condition, affecting this Agreement other than as expressed herein.” In accordance with amended terms to the APS concerning the purchase price the appellants made a partial payment of $100,000 on closing and the balance of the purchase … Read More
Waiving a Contractual Right May Not Be as Easy as You Might Think!
In the recent decision from the Ontario Court of Appeal (“ONCA”), Jack Ganz Consulting Ltd. v. Recipe Unlimited Corporation, 2021 ONCA 907, the ONCA set aside the decision of the motion judge which dismissed the plaintiff’s claim on a motion for summary judgment brought by the respondent. The ONCA opined that the motion judge made an error in law by finding that the appellant had waived the auto renewal provision of the consulting agreement that forms the basis of the dispute. The motion judge’s decision stems largely from the appellant’s representative’s email in which he stated “Let this email serve to remove the auto renewal from the contract”. The motion judge found that this email resulted in a waiver of the auto renewal provision of the consulting agreement by the appellant, and that the waiver was accepted by the respondent in a subsequent email. Though the ONCA conceded that a … Read More
Breach of Contract Lawyers – Can Contracts that do not Specify Duration or that Lack a Termination Clause be Terminated Unilaterally?
Ontario’s Court of Appeal (“ONCA”) in Conseil Scolaire Catholique Franco-Nord v. Nipissing, 2021 ONCA 544 opined on how contracts that do not specify a termination date or a procedure for termination ought to be interpreted. The ONCA grappled with the question of whether to treat a contract that was silent on the issue of termination as either (1) a perpetual contract, that does not end, or (2) a contract of indefinite duration, into which the court can imply a provision allowing for unliteral termination upon reasonable notice. Historical Approach The ONCA advised that courts used to presume that contracts which were indefinite in time were perpetual in nature. However, this approach was subsequently disregarded, and courts began to presume a right to terminate an indefinite contract by the provision of reasonable notice. New Approach The ONCA advised that even more recently, however, a contextual, fact-specific, approach has been favoured by … Read More
Entire Agreement Clause Upheld in Manorgate Estates Inc. v. Kirkor Architects and Planners
Entire Agreement Clauses are meant to prevent negotiations that occurred prior to the contract being formed from influencing the Court’s interpretation of the terms set out in the final contract. In other words, past discussions are to have no bearing on the understanding of the contractual terms. In theory, a fully integrated agreement of this kind supplants any earlier oral or written agreements. There is competing jurisprudence in which Entire Agreement Clauses have been both effective and ineffective. However, Manograte Estates Inc. v. Kirkor Architects and Planners is a recent Ontario Court of Appeal decision where an Entire Agreement Clause was effective. In Manograte Estates Inc. v. Kirkor Architects and Planners, the Ontario Court of Appeal upheld the Motion Judge’s decision that the Entire Agreement Clause in the relevant agreement, regarding architectural consulting for a construction project, operated as a complete defence to the appellants’ claim of alleged negligent misrepresentation. The Entire Agreement Clause … Read More