Owners sometimes refuse to make payment, and as a result, unpaid contractors sometimes walk off the job. It happens daily in Ontario.
Parties to a contract (or one party to a contract) may discover that the contract they signed and filed away in their desks does not accurately reflect the deal they thought they had entered. This can inevitably lead to significant disputes when steps are taken by the other party to enforce a provision of an agreement that one of the parties does not believe accurately reflects the intentions of the parties.
The Rules of Civil Procedure in Ontario require courts to apply and interpret the rules of court in a way that helps the parties secure the “just, most expeditious and least expensive determination of every civil proceeding on its merits”. Yet anyone who has been involved in a lawsuit knows that it can often take years to get the case to trial and cost many tens, if not hundreds, of thousands of dollars to get there.
The following scenario may be familiar to you: You have been negotiating an important deal. A letter of intent or some other preliminary agreement has been signed. You have exchanged numerous drafts of the agreement with the other side. Then, negotiations break down, you withdraw from the deal and the other party sues your company for breaching the preliminary agreement. The question then becomes, did the preliminary agreement constitute a contract at law and will a law suit for breach of contract succeed?