What can I do if the other party breaches a settlement agreement in Ontario?
A settlement agreement is itself a contract, and if one party fails to honour it, the other party can sue to enforce it as a breach of contract. In Ontario, you do not need to restart the original litigation from scratch — a claim on the settlement agreement is a new cause of action.
Where the original lawsuit was not yet dismissed (for example, the settlement was reached but the proceeding was held open pending payment), courts can sometimes enforce the settlement by motion within the original proceeding rather than requiring a new action. This is faster and cheaper when the breach is straightforward.
If the settlement included a release — which is typical — the release will govern whether the original claims can be revived. A well-drafted release extinguishes the original causes of action, meaning you are limited to suing on the settlement contract itself rather than going back to the underlying dispute.
Practical steps if a settlement is breached: document the breach in writing, give formal notice to the other side, and consult a lawyer promptly about whether to bring a motion in the existing proceeding (if still open) or start a new action. The two-year limitation period applies to a claim on the settlement.
Key takeaways
- Settlement agreements are contracts — breach entitles you to sue to enforce them.
- Depending on procedural status, enforcement may happen by motion or new action.
- A release typically prevents reviving the original claims — you sue on the settlement itself.
- Document the breach and give formal notice before proceeding.