It is common for an agreement for the purchase and sale of a business to contain terms restricting the future ability of the vendor to compete with the company that is sold. The intent of such a restrictive covenant is generally to protect the goodwill associated with the business. This spring, Ontario’s Court of Appeal […]
Category Archives: Commercial Litigation
Winding-Up a Corporation on “Just and Equitable” Grounds
Ontario’s Business Corporations Act provides multiple ways a court may order the winding-up of a corporation. One common route for a court-ordered winding-up is a finding of oppression under section 248. However, other sections can also be used to force a corporation to be shut down by the courts, such as section 207(1)(b)(iv). Section 207(1)(b)(iv) […]
When Will A Plaintiff’s Delays Lead To Dismissal Of Its Claim?
It goes without saying that complex litigation matters can be a time-consuming process. Depending on its complexity, it can take years for a matter to reach final resolution through the courts. In some situations, however, delays may be the fault of a party to the litigation. We have previously written about the legal consequences of […]
Can A Franchisee Rescind A Franchise Agreement For Deficient Disclosure?
In Ontario, franchise agreements are subject to the requirements of the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Act”). The Act imposes a “duty of fair dealing” on the parties to such an agreement and grants franchisees the right to form an organization of franchisees. One of the most significant aspects of the Act is […]
The Legal Effect of Requiring Payment of a Criminal Rate of Interest in a Contract
Section 347 of the Criminal Code makes it a criminal offence for someone to enter into an agreement or arrangement to receive interest at a “criminal rate” or to receive a payment or partial payment of interest at that rate. In turn, a “criminal rate” is “an effective annual rate of interest calculated in accordance […]
The Parol Evidence Rule and Contractual Interpretation
Litigation involving contracts often hinges on the interpretation to be given to one or more terms of the contract. Parties will typically advocate for a particular interpretation. Sometimes, a question arises about whether and to what extent a party can introduce evidence substantiating that interpretation. Among other things, that question may involve the application of […]
Staying Court Proceedings in the Context of International Commercial Arbitrations
It is very common for commercial contracts to include clauses requiring parties to submit disputes to arbitration. Despite this, when an actual dispute arises, a party may wish to pursue court proceedings, in which case a court may have to decide whether to stay those proceedings and allow the dispute to proceed through arbitration. In […]
What Does “Best Efforts” Mean?
Businesses that agree to carry out their contractual obligations using “best efforts” may wonder what standard that phrase imposes on them. The words have a lengthy judicial history, and the issue recently arose again in the Superior Court of Justice decision of 2271047 Ontario Ltd. v. Window City Industries Inc. In 2010, Window City Industries […]
A Review of the “Indoor Management Rule”
It is common for businesses to have long-term relationships with particular individuals. Still, when someone new comes into the picture, a business may have questions about the level of authority that person has. This issue can sometimes arise in the context of contracts between parties. When can a business assume that the individual they are […]
Contractual Terms and the Determination of Fair Value of Minority Shareholdings
It is commonly understood that minority shareholders have certain protections under the Business Corporations Act. This includes the right to dissent on a vote to approve certain significant corporate events, such as an amalgamation of the company or the sale of all of its property. The requirements for such a dissent are in section 185 […]