You do not need a signed document to sue for breach of contract in Ontario. You need an agreement, a term that was broken, and a loss you can put a number on. The loss is where most claims come apart. The two-year limitation period is where the rest of them do.
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Four things: that there was an agreement — an offer, an acceptance, something given on each side, and an intention to be legally bound; that a particular term existed; that it was breached; and that the breach caused you a measurable loss. Anger is not a head of damage.
Oral contracts are binding in Ontario. Emails, texts, quotes, purchase orders, invoices and a consistent course of dealing all serve as evidence of terms. The exceptions are contracts the Statute of Frauds requires to be in writing and signed — agreements dealing with interests in land, and guarantees, being the ones people run into.
The fight is almost always about what was agreed, not whether anything was. Documents created at the time beat recollection created afterwards. What you emailed the week it happened is worth more than anything you write about it now.
The measure is expectation: money to put you where you would have been had the contract been performed. Contract damages compensate, they do not punish, and a court will not award you a windfall because the other side behaved badly.
Two limits bite hard. Remoteness — the loss must arise naturally from the breach or have been within the parties' reasonable contemplation when they contracted, so unusual downstream losses need to have been flagged in advance. And mitigation — you must take reasonable steps to reduce your loss, and what you could have avoided is not recoverable.
Specific performance, an order that the deal actually be carried out, is exceptional and reserved mostly for land and genuinely unique subject matter. A pre-agreed sum for breach is enforceable where it is a genuine attempt to estimate the loss, and unenforceable where it is a penalty designed to frighten the other side into performing. Damages for distress are confined to contracts whose object was peace of mind.
Limitation of liability and exclusion clauses. Commercial contracts routinely cap liability at the contract value and exclude consequential and indirect loss. These are generally enforced between businesses unless the clause is unconscionable or overridden by public policy. Read yours before assuming what the claim is worth.
Notice-of-claim provisions. Construction, supply and services contracts often require written notice of a claim within a handful of days of the event. Miss it and a perfectly good claim can be contractually dead regardless of merit.
Entire agreement clauses, which prevent you relying on promises made before signing. They do not always defeat a claim in negligent misrepresentation, but they make one substantially harder. The contract is the first document to read, not the last.
Two years from the day you knew or ought reasonably to have known of the loss and that a proceeding was the appropriate remedy. The Limitations Act, 2002 presumes that day is the day the loss occurred. There is also an ultimate limitation running from the act itself, regardless of discovery. Where the obligation is payable on demand — a shareholder loan, for instance — the clock generally starts on the failure to perform after a demand is made.
Up to $50,000, Small Claims Court. Claims capped at $200,000 or less go into the Superior Court's simplified procedure, which is mandatory at that level: no jury, strictly limited discovery, a short trial and capped costs recovery. Larger claims run under the ordinary procedure, with its full discovery and full expense.
Before any of that, a demand letter that identifies the term, the breach, the number and a deadline resolves a substantial share of disputes. It also creates the record you will want if it does not.
Yes, in most cases. Oral and partly written agreements are enforceable, and the terms are proved through emails, texts, invoices, conduct and what each side actually did. The exceptions are agreements affecting an interest in land and guarantees, which generally need writing signed by the party to be charged.
Only if the breach was serious enough to amount to repudiation or to deprive you of substantially the whole benefit of the contract. Walking away over a breach that does not meet that bar makes you the party in breach. Get advice before you stop performing — this is the most common self-inflicted wound in contract disputes.
Partly. In the Superior Court a successful party typically recovers a portion of its actual fees, with a higher proportion available in specific circumstances. In Small Claims the recovery is capped. Assume you will bear a meaningful share of your own costs whatever the outcome, and price the dispute accordingly.
It depends on what it really is. A clause fixing damages in advance is enforceable if it was a genuine pre-estimate of the likely loss when the contract was made. A figure set at a level designed to compel performance rather than to compensate is a penalty and will not be enforced as written.
Then a judgment is worth little. Before spending on litigation, look for a second defendant — a guarantor, a director who made a personal misrepresentation, or a related company that received the benefit — and search for real property. Do that analysis first, not after you have a judgment nobody will pay.
Open your file tonight — a licensed Ontario lawyer will confirm everything with you by tomorrow.