Drafting agreements without legal advice is an unwise
proposition. In Vandal v Cousineau the Alberta Court of
Appeal upheld a decision to void a purported contract for
uncertainty and refused to rely on contextual factors to resolve
the deficiencies in the written document.
An experienced businessman owned an Edmonton bar named
Smokin' Joe's Roadhouse. He tried to sell Smokin'
Joe's to the bartender who worked for him. Rather than seeking
legal advice, the businessman sat down and wrote out a one-page
"purchase agreement" on a kitchen table and the parties
both signed off on same. The problem was that the "purchase
agreement" was unclear as to whether the sale was a share
purchase or an asset sale. It was also unclear as to the date of
when the change of control would occur.
The fact that both parties believed that the purported agreement
was a binding contract was irrelevant. Further irrelevant was the
parties' evidence as to what they thought the words of the
contract meant. The purported agreement was doomed by the fact that
the written text was silent as to several key issues which should
have been addressed had the parties indeed come to an
Although recent cases that have expanded the scope of admissible
evidence used to interpret contracts, the scope of such evidence is
still quite limited. While courts may consider context when
interpreting contracts, contextual considerations should not
supplant the written text such that the courts create a new
This decision highlights the importance of obtaining proper
legal advice prior to entering into a contract and illustrates the
down side of "kitchen table deals".
From a legal standpoint, litigants ought to be wary of
attempting to adduce subjective testimony of written contractual
agreements. Only objective evidence of the knowledge of the parties
at the time of the contracts formation is generally admissible.
Mackrell International - Canada - Scott Venturo LLP is
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clients. With close relations amongst our Canadian member firms, we
are committed to working with clients who have legal needs in
multiple jurisdictions within Canada.
This article is intended to be an overview and is for
informational purposes only.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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