Business Contract Disputes in Ontario: How to Resolve Them

When Business Contracts Go Wrong

Business contract disputes are among the most common civil legal matters in Ontario. Whether a customer refuses to pay, a supplier fails to deliver, or a partner violates a non-compete, understanding your legal options allows you to respond effectively and cost-efficiently.

Elements of a Breach of Contract Claim

To succeed in a breach of contract claim, you must establish: (1) a valid contract existed (offer, acceptance, consideration); (2) the other party breached a term of the contract; and (3) you suffered damages as a result. Oral contracts are enforceable in Ontario, but written contracts are easier to prove.

Available Remedies

• Damages: Monetary compensation to put you in the position you would have been in had the contract been performed. You have a duty to mitigate your losses.
• Specific performance: A court order requiring the breaching party to perform their contractual obligation. Typically available when money damages are inadequate.
• Injunction: A court order prohibiting a party from taking certain actions — for example, preventing a former employee from violating a non-compete agreement.
• Rescission: Cancelling the contract and restoring both parties to their pre-contract position, available in cases of misrepresentation or fraud.

Mediation Before Litigation

Ontario courts require mandatory mediation in Toronto, Ottawa, and Windsor before most civil matters proceed to trial. Even elsewhere, mediation often results in faster and cheaper resolution than litigation.

Limitation Periods

In Ontario, most breach of contract claims must be commenced within two years of the day you knew or ought to have known that the breach occurred. Missing the limitation period means losing your legal claim permanently. Do not delay in getting legal advice if you suspect a breach.