[5] Before this court, counsel for the appellant, who was not counsel before the motion judge, made a different argument. She submits that by May 16, 2005, the parties had reached a settlement because they had agreed on all of the essential terms. Counsel relies upon the decision of this court in Bogue v. Bogue (1999), 46 O.R. (3d) 1, which in turn relied upon this court's decision in Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 79 D.L.R. (4th) 97. The critical passage from Bawitko is found at pp. 103-104: As a matter of normal business practice, parties planning to make a formal written document the expression of their agreement, necessarily discuss and negotiate the proposed terms of the agreement before they enter into it. They frequently agree upon all of the terms to be incorporated into the intended written document before it is prepared. Their agreement may be expressed orally or by way of memorandum, by exchange of correspondence, or other informal writings. The parties may "contract to make a contract", that is to say, they may bind themselves to execute at a future date a formal written agreement containing specific terms and conditions. When they agree on all of the essential provisions to be incorporated in a formal document with the intention that their agreement shall thereupon become binding, they will have fulfilled all the requisites for the formation of a contract. The fact that a formal written document to the same effect is to be thereafter prepared and signed does not alter the binding validity of the original contract. However, when the original contract is incomplete because essential provisions intended to govern the contractual relationship have not been settled or agreed upon; or the contract is too general or uncertain to be valid in itself and is dependent on the making of a formal contract; or the understanding or intention of the parties, even if there is no uncertainty as to the terms of their agreement, is that their legal obligations are to be deferred until a formal contract has been approved and executed, the original or preliminary agreement cannot constitute an enforceable contract. In other words, in such circumstances the "contract to make a contract" is not a contract at all. The execution of the contemplated formal document is not intended only as a solemn record or memorial of an already complete and binding contract but is essential to the formation of the contract itself.
[6] The appellant says that from May 16 the parties had agreed on all of the essential terms of the settlement, and the fact that there was some uncertainty about whether the written memorandum of those terms was open for signature is beside the point; the parties had made a contract. As in Bawitko, the fact that the parties contemplated that there was to be a formal written document to the same effect as the terms upon which the parties had agreed does not alter the binding validity of the original agreement or settlement.
[7] In our view, the motion judge did not err in finding that the June 22 Minutes were no longer open for acceptance. We would also not give effect to the slightly different argument made before us. We address that latter argument first.
[8] As the passage quoted above from Bawitko indicates, the intention of the parties is important in determining whether or not there was a final settlement that was merely to be recorded in a formal document. The term "intention" is not used in a subjective sense but rather to refer to whether "in the eyes of a hypothetical onlooker [the parties] appeared to have reached an agreement": G.H.L. Fridman, The Law of Contract in Canada, 5th ed. ( Toronto: Thomson Carswell, 2006), at p. 6. In making this determination, the court will look at the conduct of the parties at the time. As was said in Bawitko at p. 104, if in examining what transpired it is apparent that "execution of the contemplated formal document is not intended only as a solemn record or memorial of an already complete and binding contract but is essential to the formation of the contract itself", there is no contract, or in this case, no settlement.
James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4
1 comment:
James - it wouldn't appear to me that the Ontario C.A. decision really says much new - an "agreement to agree" is nothing - and the court affirms that it's a question of fact in determining if the constituent elements of agreement existed - only subject to formalization - or whether the parties understood, by their conduct, that they had nothing "until" formalization..
The more interesting question, however, is the degree to which the family courts have whittled away against the wife's notional capacity to enter into contract.
They say hard facts make bad law - and it's true. Each time we find a more difficult fact pattern (see Bracklow) the S.C.C. finds another way of helping a litigant (almost always a woman) avoid the downside of her voluntary decisions - starting with marriage and ending with the terms of settlement agreements.
Almost implicit in the current standard of Canadian Family Law jurisprudence is that women no longer have full capacity to enter into formal legal obligations.. is this really the intent of the move to equality? By sending a very unsubtle message that women are "less than" when they enter into domestic contracts?
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