Review the contract first.

No matter whether you are a plaintiff or defendant in a small claims court matter about a breach of contract. The first step is, of course, to review the contract itself. From there, you would look to determine the following:

• 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.

Form of the contract

• 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, the court can ascertain its terms by looking at the exchange, written or verbal, to decide what the parties consented to.

What a breach of contract means

• A breach of contract is an action or inaction that violates an important provision of the contract.
• It cannot be something trivial. A breach of contract happens when one party fails to perform the duties required under the contract.
• It may be a serious or “fundamental breach” of the contract. For example, if a contract is for the delivery of some goods, a fundamental breach may be the failure to deliver the goods. Also, it may be a failure to deliver on time or delivering defective goods.

Consumer Protection Act, sales of goods act

• The are several acts of legislation that regulate contracts in Ontario.
• The most common example is when a contract between a consumer and a goods/services provider is subject to the Consumer Protection Act. Another example is the Sales of Goods Act.
• If a disputed contract is within the jurisdiction of these acts, it may broaden the legal arguments and strategies in the court.

the contract must be valid

•  A disputed contract must be valid. Otherwise, the Small Claims Court will not support and enforce it.  The contract must meet several conditions to be valid:
  • Both parties must have the mental capacity to understand and agree to the subject of the contract.
  • They 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 this is important to consider when they arise.

Evidence

• 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.

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

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.