In its simplest form, a contract is an agreement between two parties. Agreements form the basis for most financial transactions and economic activity. It’s for this reason that contracts are at the center of most commercial litigation disputes. As a corporate lawyer in Toronto, with contract disputes at the center of his litigation practice, Matthew R. Harris is adept at achieving client goals for resolution.
If you’re facing a contract dispute in Toronto, or in the nearby areas of Hamilton, London, or Ottawa, contact Matthew R Harris Law P.C. immediately. Matthew maintains a corporate law and commercial litigation practice. He can confer with you, discuss your situation, and advise you of your options going forward, including the option of litigation when necessary.
It’s not uncommon for businesses or individuals doing business together to run into disagreements. If unresolved, those disagreements can turn into disputes or even breaches of contract — in which one party feels the other party has not lived up to its contractual obligations.
Some of the most common contract disputes that the firm has dealt with over the years include:
Service and supply contracts
Financial service contracts
Construction and development contracts
Joint venture agreements
Under Canadian law, a contract can be defined as an agreement between two or more parties that is legally binding. To be considered valid, a contract must contain five elements:
Offer and Acceptance: One party makes an offer to another party, and the other party accepts.
Consideration: What each party will exchange for value. For instance, Company A will provide widgets to Company B, who will pay for them with cash.
Capacity: Each party must be capable of understanding the terms of the agreement. Generally, the signees must be of majority age, not under the influence of drugs or alcohol, nor of impaired or limited mental capacity.
Consent: Each party must freely agree to the contract without coercion or deceit.
Lawful Purpose: A contract cannot be valid if its purpose is to accomplish something forbidden by law. For example, you cannot agree to manufacture and sell banned drugs.
Typically, you can either have an express or implied contract. An express contract means the terms are clearly spelled out and understood by all parties. Implied means the agreed-upon terms are inferred by the parties’ conduct. For example, if you go into a restaurant and order dinner, it is implied that you will pay for it at the end.
Contracts are considered to be “under seal” when they are written, signed, witnessed, and marked with a seal. A simple contract is not sealed, and can be verbal, written, or implied.
A breach of contract means that one party has failed to fulfill its side of the agreement, and the other party was thus harmed by the other’s action or lack of action.
If Company A has agreed to deliver 200 widgets to Company B each week, but fails to do so and causes “harm” to Company A (it loses customers and revenue, for instance), that would be considered a breach. Another example would be if Person A owes ABC Bank $500 a month for a personal loan, but starts missing payments — that is also considered a breach of contract.
The elements of a breach of contract are thus:
The existence of a contract
The nonperformance of one party
Damages to the innocent party resulting from the other’s nonperformance
A well-written and conceived contract will include provisions for dispute resolution, so relying on the agreed-upon methods contained in the contract is always best. If the contract is silent in this regard, the first step is to negotiate.
The benefits of negotiation are clear. You can avoid stress, lost time, and the expense of litigation through successful negotiation. There is also the potential to retain the business relationship if matters can be resolved peacefully. If negotiations, even with the help of your lawyer, reach a standstill, you can turn to mediation or arbitration.
A mediator may be able to bring the two sides to an agreement, while an outside arbitrator can propose a resolution that is either binding or non-binding. These so-called alternative dispute resolution methods are generally preferable to the costs and entanglements of legal proceedings.
If matters end up in court, the most common remedy is a monetary reward known as damages to cover the losses of the innocent party. The court may also order an equitable remedy called specific performance, whereby the breaching party would be ordered to fulfill its obligations.
If one party has been taken to court over a breach of contract, a lot will hinge on the contract. If it is a written contract, the defense can challenge the clarity of the language and point out ambiguities. If it is an oral or implied contract, the defense can challenge the terms of the agreement, saying in effect that the defendant never agreed to the terms under question.
Other defenses include claiming to be coerced into the agreement, being deceived, or being subject to an “unconscionable” contract in which one party wields too much power.
Most business owners seek expedient resolution to any conflict, so as to avoid interruption of business activities and negative publicity. The commercial litigation strategy at the firm of Matthew R Harris Law P.C. takes into account each client's overall goals and is not restricted to the outcome of the case.
Reaching an agreement prior to trial or participation in mediation, arbitration or any other out-of-court process is sometimes best from a legal and a business perspective. If you or someone you know is facing a difficult contract dispute, don’t face this challenge alone. Contact Matthew R Harris Law P.C. today for reliable legal counsel and representation.
To learn more about how the firm of Matthew R Harris Law P.C. can assist in the prevention of conflict with competitors or consumers, or to seek assistance if you’re already facing a contract dispute, call or reach out today for a one-on-one consultation. With extensive experience handling contract disputes and other issues related to commercial litigation, Matthew R Harris is prepared to help you find a resolution that can help you move forward. Call or reach out today to learn more.