In Brant Securities Limited v. Goss, 2025 ONCA 8, the Ontario Court of Appeal affirmed some key principles surrounding a vital component of the legal contract: the exchange of valid consideration.
The appellant was a financial advisor who joined an investment brokerage in 2013. As part of his employment agreement, the appellant received a “recruitment bonus” which took the form of an interest-free loan from the brokerage to finance the appellant’s purchase of shares in its parent company. The note was payable back in ten equal annual installments, but each installment would be waived and credited against the loan’s balance if the appellant met certain performance metrics. Essentially – the “recruitment bonus” was a loan forgiveness program for the appellant’s share purchase financing.
The appellant met his performance metrics in the first two years of the loan, but the credits were never awarded by the brokerage. When the brokerage was purchased by the respondent in 2016, the respondent was assigned the loan as part of the transaction, and the appellant and respondent agreed to an amended and restated loan that:
- Corrected the names of the parties to the original loan;
- Extended the term of the loan by two years;
- Confirmed no payments had been made on the loan by the appellant; and
- Confirmed that no bonuses had been awarded by the brokerage/respondent.
Essentially, the amended and restated loan “re-started” the agreement, commencing in 2017. Between 2017-2020, the bonuses were earned and credited. When the respondent was purchased by another company in or around 2021, the purchaser terminated the appellant’s employment and demanded payment of the amended loan’s balance. The appellant claimed that the requested amount was not owed, as the amended and restated loan was void for lack of fresh consideration from the respondent to the appellant. When the respondent won at a summary judgment motion, the appellant made the same argument on this appeal.
The Ontario Court of Appeal endorsed the motion judge’s statement of the law concerning a key component of legally enforceable contracts – the exchange of consideration:
“The motion judge correctly summarized several core principles concerning the law of consideration. He set out the long-standing principle that consideration can take multiple forms and that the law does not concern itself with the adequacy thereof. As long as there is consideration, the court leaves it to parties to form their own judgment over the adequacy thereof and to make their own bargain. Further, as he provided, the law does not require that consideration be in the form of money, or that the economic value of the benefits provided equal or exceed the economic cost of the agreement.
The motion judge also correctly held that clarifying an unclear term in a contract to create certainly and avoid disputes can constitute valid consideration.” [citations omitted]
Ultimately, the Court found no error in the motion judge’s determination that three distinct benefits flowed to the appellant under the amended and restated note:
- A clarification of the relationship between the parties to the note, which provided additional certainty to the contract during the company changing hands;
- An opportunity for the appellant to defer income tax, which would otherwise have been owing if the bonuses were awarded in 2014 and 2015; and
- The provision of two additional years of interest-free status of the loan.
Upon finding that these three benefits were sufficient consideration to form a legally binding contract, the Court dismissed the appeal.
Brant Securities is an important reminder for parties who are entering or amending contractual agreements. Any benefit received pursuant to an agreement (which could include an amendment to clarify an agreement’s terms) could be seen as valid consideration. Parties should also know that Ontario courts are deferential to the assessment of a contractual benefit’s economic value by contracting parties – even if it appears to be nominal to an outside observer.
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