November 5, 2024

By Mark Mikulasik

We have talked about the advantages of putting a contract in writing.

THE ISSUE

You need to be aware that if you put the contract in writing, particularly if it deals with land, evidence of a witness (as opposed to written evidence) will not be admitted if it contradicts the written terms of the contract.

THE CASE

A recent reminder is found in Parkland Corporation v. Caledon Fuels Inc., an Ontario Superior Court decision which awarded a permanent injunction to the applicant as a remedy to enforce the lease.

In order to get there, the judge considers a number of issues, as is normal in this sort of case.

Among the issues was the evidence of a representative of the respondent. They said that the spokespeople for the applicant had, during the negotiations, promised that if the lease was renewed, it would be on revised terms more favourable to the respondent. This is not what the signed lease says about renewal. The signed document gave the applicant the right to renew on the same terms as the signed lease. The respondent was a new tenant who took an assignment of the lease and claimed the assurance was given at the time the applicant landlord approved the assignment.

The judge did say that the alleged agreement did not violate the Stature of Frauds, the law that requires agreements relating to land to be in writing, because of part performance of the agreement. This illustrates that the Statute of Frauds  should not be taken at face value, a mistake often made by non-lawyers. If that had been the only issue, the oral agreement would be valid.

However, the alleged oral agreement was found not binding on the applicant because:

1. There was no consideration for the promise, if it was made. We have discussed the need for consideration to form a binding contract before
2. The evidence violates the “parol evidence rule” which is designed to
3. to achieve finality and certainty in contractual obligations; and
4. to hamper a party’s ability to use fabricated evidence to attack a contract
5. The “misrepresentation exclusion” did not apply here because:
6. the alleged representation was not of fact, but of future intention;
7. it would have been unreasonable for Caledon to rely upon it in the face of the clear and unequivocable wording of the renewal option.

 

The judge also found that the evidence of the alleged oral agreement was not believable, in any event.

Affidavits filed after cross-examinations were also not admitted as evidence. The applicant was found not to violated the obligation of good faith performance of contract.

The applicant otherwise met the test for a permanent injunction.

TAKEAWAYS

Get it in writing, and make sure that the written document captures the entire agreement.

WHAT WEILERS LLP CAN DO FOR YOU

The real estate and commercial transactions lawyers at Weilers LLP carry on our proud tradition of advising clients about the risks and obligations that they are undertaking before they sign a contract.

If difficulties arise, we work with our clients and their other advisors to attempt to resolve the problems.

If the problems cannot be resolved on a friendly basis, then our litigation lawyers may be able to assist with damage control. They understand the importance of facts, the law of evidence, and how to prove your case.

If you find yourself needing advice about your risks or obligations under a real estate or commercial contract, it is best to seek the advice early. Feel free to give Weilers LLP a call and see if we are the right lawyers for you.