By Donald H. Lapowich
The words used in contracts and amendments must always be carefully considered and prudently devised.
The plaintiffs purchased a number of condo suites and under their purchase agreement, the completion date was estimated as Sept. 28, 2007, but the contract could be cancelled if “completion date” had not occurred by Mar. 31, 2008.
The plaintiffs paid substantial deposits. In March 2007, the developer sent a document entitled Receipt and Acknowledgement. It purported to extend the estimated completion date to September 2008 and “outside” completion date to March 31, 2009.
Notwithstanding the plaintiffs signing of the “receipt” document, they cancelled the contracts in October 2008.
The court ordered the defendant to return the deposits. Nowhere in the contract was there the use of the term “outside” completion date and attempting to amend to that “worded description – March 31, 2009” was of no effect. September 2008 passed and the termination was valid in October 2008.
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In another case, the landlord and tenant agreed in an Agreement for Lease to a tenancy term.
However, in the “formal” lease, the landlord attempted to have the tenant pay for installations and/or improvements that the municipality required to the premises. This was not set out or discussed in the agreement. The tenant did not sign the “formal” lease and quit the property.
The court held that the tenant taking possession and paying rent did not lead to the parties entering a “binding contract”.
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In a different case, a tenant leased the landlord’s premises and subleased the exterior wall to a subtenant, so the subtenant could place advertising on that wall.
Unfortunately, the tenant under the head lease failed to pay rent and the landlord took steps to terminate the lease. The subtenant attempted to stop the landlord by arguing that it would breach a contractual relation between the tenant and subtenant if the head lease was terminated.
The Ontario Court of Appeal held that the tenant’s wrongful conduct would incidentally thwart the subtenant. However, mere knowledge by a landlord of a subtenant’s involvement with its tenant and of the likely consequences of terminating the head lease did not result in a “tort action” against the landlord by the subtenant.
Donald Lapowich, Q.C. is a partner at the law firm of Koskie, Minsky in Toronto, where he practices civil litigation, with a particular emphasis on real estate litigation and mediation, acting for builders, real estate agents and lawyers.
