In September 2015, in Buaron v Acuity Ads Inc, 2015 ONSC 5774, the Ontario Superior Court of Justice ruled that if an employer and employee come to an initial agreement (in this case, the "Offer Letter") that has all the elements of a contract, a subsequent agreement (in this case, a formal employment contract) won't be valid unless there is additional consideration.

Prior to hiring, the employee signed an offer letter that contained all of the necessary terms of an employment contract but provided that he would be asked to sign a subsequent agreement. The subsequent agreement contained additional restrictive covenants. The Court held that once the employee received the Offer Letter, he had a valid employment contract and that the the subsequent contract he was required to sign was unenforceable as no new or additional consideration was provided in exchange for signing.

Bottom line? When negotiating with a prospective candidate, employers would be prudent to ensure that the only written offer that a candidate receives (and is requested to sign) is their formal employment agreement.

Written with the assistance of Nader Hasan, articling student.

About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.

Law around the world
nortonrosefulbright.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.