Litigating in Small Claims Court about Breaking a Contract

Whether you are a plaintiff or defendant in a small claims court matter related to a breach of contract, the first step is, of course, to review the contract itself. From there, we would look to answer several questions in order to determine whether there are good grounds to sue, what a good claim or defence may look like, and what kind of damages can be claimed (or successfully refuted).

There are several common considerations to keep in mind when it comes to litigating in small claims court on the basis of a contract.

  1. A contract isn’t necessarily a written piece of paper. An exchange of emails or letters or even a verbal agreement is often enough to constitute a contract. If this is the kind of contract you have, then the provisions of the contract would be ascertained by looking at the exchange, written or verbal, and discerning what the parties consented to.
  2. In order for a party to be entitled to some legal recourse for breaching a contract, the nature of the breaching party’s actions must be such that they violate an important provision, not something trivial, i.e. there must be a “fundamental breach” of the contract. For example, in a contract was for the delivery of some goods, a fundamental breach may be failing to deliver the goods on time or delivering defective goods. It is only if the breach were fundamental that the party who was harmed by the violation of the contract may be entitled to some legal recourse.
  3. Sometimes the subject matter of a contract may be subject not only to contract law and related legislation and precedents, but other pieces of legislation, as well. The most common example is when a contract between a consumer and a goods/services provider is subject to the Consumer Protection Act in addition to contract law. This may broaden the range of legal arguments and strategies that can be used.
  4. In order for a contract to be valid and, therefore, supported and enforceable through the court, it must meet several conditions. These include conditions such as:
    • The parties must both have the mental capacity to understand and agree to the subject of the contract, and
    • must not have been forced into signing the contract.
    • The subject of the contract must be lawful.
    • Additionally, some specific provisions of a contract may be invalid. For example, in many situations, a party can’t sign away his/her right to sue. Situations where the contract is invalid do not arise frequently, but when they do arise, this is important to consider.

 Matters related to breach of contract are very common subject matter for small claims court litigation. These cover common business situations like sale of goods and services, as well as more personal situations, such as two friends agreeing to go on vacation and each pay half for the hotel, and then disputing the payments.

Typically, the most important issues and pieces of evidence related to contract litigation are the contract itself (of course) and evidence of its breach, such as evidence that the goods/services were defective or delivered in an untimely manner.

As each matter is different and may have its own caveats, it is important to consider each case individually. Please feel free to contact us for a free assessment of your small claims court matter.

Sylvie, Toronto

I really appreciated your attention to details, your level of preparation which was impressive, and enthusiasm. I am really happy we have Spectrum Paralegal in our corner. Thank you for being the champion of our small claims court!