Travis W. Brine recently successfully defended a breach of contract claim arising from an alleged agreement to purchase our clients’ business and property.
In the case of 0827857 B.C. Ltd. v. DNR Towing Inc. 2020 BCSC 717, the purchaser was seeking the remedy of specific performance based on its assertion that the parties had reached a verbal agreement on all of the essential terms for the sale of the business. Our clients disputed that a final agreement had ever been reached and argued in any event that such an agreement to be enforceable was required to be in writing and signed by the parties.
In dismissing the purchaser’s claim, Mr. Justice Ehrcke, ruled that the issue was not whether the purchaser subjectively thought there was a legally binding oral contract but rather whether a reasonable objective observer considering all the circumstances would have understood that the parties intended to be legally bound prior to the signing of a written contract. On the basis of the evidence, Mr. Justice Ehrcke held that a reasonable objective observer would conclude that the parties did not intend to be legally bound until they had signed a written contract.
In addition, Mr. Justice Ehrcke dismissed the purchaser’s claim on the basis that the transaction involved a sale of real property and as a result the contract had to be in writing and signed pursuant to section 59 (3) of the Law and Equity Act. The court rejected the purchaser’s argument that exceptions in the Law and Equity Act applied to his case. As a result, the court dismissed the purchaser’s claim against our clients in its entirety.