Vendors breached contracts by failing to provide materials required to perform due diligence

Ontario civil | Real Property | Sale of land | Agreement of purchase and sale

Plaintiff purchaser N Inc. entered into agreements of purchase and sale to purchase three commercial properties from defendant vendors, numbered companies controlled by G. Agreements contained comprehensive entire agreement clause. Principal of purchaser, N, agreed to offer much higher price for S property because he had due diligence clause that permitted purchaser's sole discretion to walk away from deal if after doing due diligence, offer was too much. Purchaser chose not to waive due diligence condition and backed out on S property. Vendors refused to close on other two properties on basis that all three agreements were cross-conditional and package deal. Purchaser brought motion for summary judgment on its actions for breach of contract and to dismiss vendors' counterclaims. Motion granted. Vendors breached contracts, issue of damages would be referred to master, and counterclaims were dismissed. N was credible and reliable witness. G was credible and he did not have significant diminished mental capacity, but his evidence was not reliable or plausible given his age, other evidence and circumstances. Fact that purchaser raised offer price 137 per cent on S property raised red flag, but there was credible reason why N was willing to increase price on S property. If package deal was important to G, he should have placed it in agreements but he did not. Cross-conditional clause or agreement was not part of deal. Purchaser proved that vendors breached contracts by failing to provide materials required to perform due diligence. Deals did not close because G did not want them to, which was breach of contracts.

NJS Capital v. 555034 (2018), 2018 CarswellOnt 21405, 2018 ONSC 7388, S. Nakatsuru J. (Ont. S.C.J.).

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