Material terms required determination before there could be legally enforceable agreement

Contracts - Formation of Contract - Consensus Ad Idem

Applicant CB acquired real estate property through company 500 Ltd. with intention of developing condominium project. Pursuant to letter agreement, respondent AC would acquire 50 per cent interest in property. Funding paragraph in agreement provided that AC had obligation to fund CB’s share of project costs, referred to as CB option. Relationship broke down and joint venture did not proceed. Trial judge dismissed CB's action for declaration that AC breached obligations under agreement and for damages for loss of profits. Judge held that AC was not obligated to fund CB’s 50 per cent of project costs. Judge found that funding paragraph was missing key terms, and that parties failed to reach agreement on how they would proceed to develop property. CB appealed, seeking declaration that CB option was legally enforceable and order for damages. Appeal dismissed. There was no palpable and overriding error in determining that CB option was unenforceable. Conclusion that CB option was unenforceable due to parties' failure to agree on its material terms was reasonable. There were material terms, such as amount and timing of funding, that parties did not address which required determination before there could be legally enforceable agreement. Obligation of parties to bear 50 per cent of all development costs was subject to execution of development agreement, but since parties failed to reach such agreement, CB option was necessarily unenforceable. AC did not breach CB option and his actions did not give rise to claim for damages.

The Estate of Claude Bitton v. Checroune (2019), 2019 CarswellOnt 12832, 2019 ONSC 4655, Swinton J., Backhouse J., and Wilton-Siegel J. (Ont. Div. Ct.); affirmed (2017), 2017 CarswellOnt 6694, 2017 ONSC 2434, J.T. Akbarali J. (Ont. S.C.J.). (Ont. Div. Ct.); affirmed (2017), 2017 CarswellOnt 15276, 2017 ONSC 5542, J.T. Akbarali J. (Ont. S.C.J.).

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