A contract is a legally binding promise. When one party fails to uphold their end of the bargain, it can cause significant financial and operational harm. Understanding your remedies under Ontario law is essential.
The short answer
If a breach of contract occurs, you can seek remedies such as monetary damages to cover your losses, or in rare cases, specific performance (forcing the other party to fulfill the contract). The first step is usually a formal demand letter, followed by civil litigation if the matter cannot be resolved.
Types of breaches
Not all breaches are equal. A material breach goes to the heart of the contract, potentially allowing you to terminate the agreement and sue for damages. A minor breach may only allow you to sue for actual damages while the contract remains intact. Contract disputes frequently arise in commercial settings, including commercial tenancies, where lease agreements are breached.
Calculating Damages
The most common remedy is compensatory damages, designed to put you in the position you would have been in had the contract been fulfilled. You have a legal duty to mitigate (minimize) your losses after a breach.
The Limitation Period
In Ontario, you generally have two years from the date you discovered (or ought to have discovered) the breach to file a lawsuit. Missing this deadline usually means losing your right to sue. In cases involving fraud or criminal offences like theft and fraud, different limitation rules and concurrent criminal proceedings may apply.
When to talk to a lawyer
Contract disputes require careful analysis of the written agreement and the surrounding circumstances. Kuner Law represents businesses and individuals in Mississauga in complex contract disputes. Book a consultation to review your contract.
Frequently asked questions
Q: Can I cancel a contract if the other party breaches it?
A: Only if the breach is considered a 'material breach' or 'fundamental breach' that deprives you of substantially the whole benefit of the contract.
Q: Is a verbal contract legally binding in Ontario?
A: Yes, verbal contracts can be binding, but they are much harder to prove in court without written evidence or witness testimony.
About the Author
Jora Kuner
Jora Kuner is the founder of Kuner Law and a lawyer called to the bar of the Law Society of Ontario. He holds a Juris Doctor from Bond University, an NCA Certificate, a BA (Hons.) from York University, and a Certificate in Dispute Resolution. He practises civil litigation, criminal defence, and tenancies in Mississauga and across Ontario.
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