In the recent Ontario Court of Appeal decision in VanderMolen Homes Inc. v. Mani, 2025 ONCA 45, the appellants, a couple seeking to purchase a newly constructed home in Exeter, Ontario, entered into an agreement of purchase and sale with the respondent on January 13, 2022. The agreement was conditional, with a second deposit required upon removal of all conditions by January 20, 2022. The appellants requested an extension of the condition fulfillment deadline to January 26, 2022, with their offer set to expire at 11:59 p.m. on January 21, 2022. However, the respondent accepted this extension one day late, on January 22, 2022. Despite this, the appellants signed a waiver of conditions and provided the second deposit on January 26, 2022. Subsequent communications between the parties were minimal, with the appellants later alleging that they had assumed the deal was not proceeding. On August 17, 2022, just weeks before … Read More
Surrounding Circumstances of Contracts – When Are They Relevant? Ontario Superior Court of Justice Weighs In
In Wei v. Ye-Hang Canada (EH-C) Technology & Services Inc., 2025 ONSC 546, The Ontario Superior Court of Justice engaged with a relatively nuanced evidentiary principle in interpreting a contract’s terms: the circumstances surrounding a contract, and when they can be admitted as evidence to interpret a contract’s language. The defendant offered the plaintiff an investment opportunity in 2022. The defendant claimed her company was the exclusive agent in Canada for a well-known manufacturer of drone technology, which is publicly traded in the United States. The parties entered an agreement where the plaintiff would fund the acquisition of drones by an affiliate corporation of the defendant’s company, and the plaintiff would receive 5% of the affiliate’s shares in exchange for her investment. The plaintiff advanced over $700,000 pursuant to the agreement. The defendant signed a loan receipt wherein she acknowledged the plaintiff’s investment, and an obligation to pay back the … Read More
A Cautionary Tale in Contract Interpretation: ID Inc. v. Toronto Wholesale Produce Association, 2025 ONCA 22
The Ontario Court of Appeal recently issued a significant decision in ID Inc. v. Toronto Wholesale Produce Association, 2025 ONCA 22, addressing fundamental principles of contract interpretation. The Plaintiff/Respondent, a company specializing in outdoor advertising opportunities, proposed transforming a traditional billboard at the Ontario Food Terminal (“OFT”) into a lucrative digital sign. The Plaintiff/Respondent entered into a Sale and Maintenance Agreement (“SMA”) with the Defendant/Appellant, which required the Plaintiff/Respondent to secure a necessary permit for transforming the billboard within 360 days (the “Permit”). While the Plaintiff began the Permit process, the Defendant/Appellant directed it to halt municipal efforts and explore a provincial approval path. This shift, driven by legal opinions suggesting the OFT Board might be exempt from municipal regulations, ultimately led to the SMA’s expiration without the Permit being acquired. The Defendant/Appellant later awarded the digital sign project to another company, sparking the within litigation. Key Issues on Appeal … Read More
Evidence in Summary Judgment Motions: Ontario Superior Court Provides Guidance for Responding Parties
A recent decision of the Ontario Superior Court of Justice (the “Court”) provides an important reminder for parties responding to a summary judgment motion. In Lukey Capital Corp v. 1000110300 Ontario Inc. et al, 2024 ONSC 6589 (“Lukey Capital”), the plaintiff brought a motion for summary judgment before the Court for the payment of a loan it made to the Defendants under a promissory note. Upon reviewing the evidence before it, the Court granted the sought relief. In doing so, the Court underscored a key principle for parties responding to a summary judgment motion to keep in mind. The Defendants made several arguments that there were genuine issues in the proceeding which required a trial. Among these arguments was a submission that other evidence may be uncovered through further examinations and productions which would support their defence. The Court, echoing well-settled principles regarding evidence on summary judgment motions … Read More
Certainty in Contractual Agreements: Ontario Court of Appeal Emphasizes Importance of Essential Terms
A recent case from the Ontario Court of Appeal highlights that commercial parties must take care to ensure that their contracts are certain on essential terms when dealing with unsophisticated counterparties. In Corridor Transport Inc. v. Vittorio Junior Lentini, 2024 ONCA 773, a corporation was set up to carry on business transporting steel products (the “Venture”). 50% of the shares in the Venture were held by a sophisticated businessman (“JH”), and the other 50% were held by a trucking company that operated a separate business from the Venture (“Lentini”). Lentini’s principal left school after the fifth grade and immigrated to Canada from Italy as a young adult. The Venture claimed that JH would provide its startup and expansion capital , and Lentini would manage its day-to-day operations as an independent contractor. The parties agreed that Lentini could continue to operate its separate trucking business while participating in the Venture. … Read More
Time is of the Essence – Court-Imposed Deadline for Contractual Performance Upheld by Ontario Court of Appeal
In 2533619 Ontario Inc. (Calibrex Development Group) v. Lucadamo, 2024 ONCA 536, the Ontario Court of Appeal upheld a court-imposed deadline for a party’s performance of its obligations under an agreement of purchase and sale. The appellant was the purchaser of three residential lots under an Agreement of Purchase and Sale that it had entered into with the respondent vendor in 2017 (the “APS”). The APS included a clause that allowed any deadline in the agreement to be extended or abridged by agreement. The closing of the APS was originally stipulated as a a fixed date, but the parties consented to a new closing date of “30 days following the appellant’s receipt of severance approval for the lots.” Five years elapsed between the amendment date and the appellant’s commencement of its severance application. When the application got underway in 2022, the appellant was told by the respondent that the APS … Read More
Ontario Court of Appeal upholds Partial Summary Judgment Decision in VP Auto Sales & Service Ltd v Ahmed2 Inc.
VP Auto Sales & Service Ltd. v Ahmed2 Inc., 2024 ONCA 507, saw the Ontario Court of Appeal (the “Court”) address a motion judge’s grant of partial summary judgment, with damages being reserved for trial. The Court, in one of its rare decisions on partial summary judgment, agreed with Motion judge’s ruling. The respondent entered an Agreement of Purchase and Sale (the “Agreement”) with the appellant. Before the closing, the appellant raised concerns about the price being too high and requested a discount, which was refused by the respondent. On the scheduled closing date, the appellant did not proceed with the transaction, citing a breach of the Agreement by the respondent. This resulted in the property remaining unsold, prompting the respondent to seek summary judgment against the appellant for the purchase price of $4,750,000. The motion judge granted summary judgment on liability, finding the appellant accountable for the failure to … Read More
Enforceability of Non-Compete Clauses in a Business Sale Upheld by Ontario Court of Appeal
In Dr. C. Sims Dentistry Professional Corporation v. Cooke, 2024 ONCA 388, the Ontario Court of Appeal confirmed that restrictive covenants negotiated as part of the sale of a business must be treated differently by courts than those contained in employment contracts. The dispute arose from an agreement of purchase and sale between two dentists for a dentistry practice in Hamilton, Ontario (the “APS”). The APS contained a non-solicitation/non-competition provision, which prohibited the vendor from practicing dentistry within 15 km of the practice for a period of five years post-closing (the “Noncompete Provision”). About three years after the purchase and sale, the vendor began working at a separate practice in a location that violated the Noncompete Provision, and the purchaser commenced an action to enforce it. The purchaser was successful at trial, and the vendor made this appeal. In his appeal, the vendor submitted that the trial judge incorrectly placed … Read More
Licensing Breaches and Lingering Fiduciary Obligations – Ontario Court of Appeal Rules License Agreement Breach Constitutes Fiduciary Duty Violation
In 7868073 Canada Ltd v 1841978 Ontario Inc, 2024 ONCA 371, the Ontario Court of Appeal recently assessed the legal effects of engaging in competing business ventures and the importance of honoring fiduciary duties stemming from license agreements following a parties departure from a former corporation. Robert Langlois (“Langlois”), alongside two partners, launched a powder-coating business, whereby Langlois granted a perpetual license (the “License”) for his industry “knowledge” to 7868073 Ontario Inc. (“786”), a company which the three parties formed and held equal shares in. In turn, 786 owned shares in two other companies (collectively referred to as “ACS”), which Langlois worked with. When Langlois left ACS to start another business without informing his former partners, ACS alleged that Langlois breached the License. The Court of Appeal affirmed the trial judge’s findings, rejecting the argument that the License was void ab initio due to its unreasonable worldwide scope and restrictions … Read More
A Promise Made is a Promise Kept: Ontario Superior Court Grants Permanent Injunction to Enforce Provisions of Long-term Supply and Lease Agreement
In Parkland Corporation v. Caledon Fuels Inc., 2024 ONSC 2361, the Ontario Superior Court of Justice granted an injunction which prevented a party to a long-term lease and supply agreement from breaching certain negative covenants contained in that contract. The Applicant and Respondent were both parties to an agreement under which the Applicant was made the exclusive supplier of petroleum products to a gas station which it subleased to the Respondent. In January of 2024, the Respondent notified the Applicant that it intended to enter into arrangements with another supplier, in contravention of the agreement. The Applicant brought an urgent application seeking a permanent injunction, to prevent the Respondent from doing so. In its decision, the Court’s analysis on the injunctive relief sought by the Applicant followed the Ontario Court of Appeal’s decision in 711811 Ontario Ltd. (AdLine) v. Buckley Insurance Brokers Ltd., 2014 ONCA 125, where that Court cited … Read More
Breach of Agreement of Purchase and Sale – What are Your Options?
The Ontario Court of Appeal (ONCA) in Ching v. Pier 27 Toronto Inc., 2021 ONCA 551 (CanLII), recently outlined the options an innocent party to an agreement of purchase and sale (APS) has upon the other party breaching (i.e. repudiating) the APS. General Principles Repudiation is the refusal of one party to an APS to abide by the terms of the APS. Repudiation by one party does not in itself result in the termination of the APS. Rather, repudiation provides the innocent party (i.e. the non-repudiating party) to the APS with the following choices: Accept the repudiation (i.e. disaffirm the APS); or Treat the APS as subsisting (i.e. affirm the APS). The innocent party generally has a reasonable period of time to choose whether to disaffirm or affirm the APS. However, waiting too long may result in a court determining that the APS has been affirmed. During this reasonable waiting … Read More
Supreme Court of Canada Clarifies Duty Of Honest Performance In Contractual Relationships
In the decision of C.M. Callow Inc. v. Zollinger, 2020 SCC 45, the Supreme Court of Canada (SCC) expands on the scope of the duty of honest performance in contractual relationships, previously established by the SCC ruling in Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494. Our firm previously blogged about the Court of Appeal Ruling in this case. See the previous blog here. The case concerns a breach of contract claim made by the Plaintiff. The Plaintiff is a company that provides maintenance services to condominium communities. The Defendants, a group of condominium corporations, had winter and summer maintenance contracts with the Plaintiff that renewed every two years. The contracts originated in 2012 and ran to 2014. In March or April of 2013, the Defendants decided to terminate the winter contract but they did not provide notice of their intention to terminate until September of 2013. The Defendants delayed … 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