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Michael Carabash, B.A., LL.B., J.D., M.B.A. [email protected] Need an Ontario Lawyer? Make a Post. Get FREE Quotes! www.DynamicLawyers.com
Is My Legal Form Valid and Enforceable? Page 3 o
Introduction
You download a template. It is incomplete. You read it over and finish it. Perhaps you even add a
provisions of your own to take into account your particular circumstances. Then you and all the other pa
sign it and deliver it to each other. So, is it a valid and enforceable contract? The answer is:
DEPENDS”. The truth is that parties may never know if their legal form is valid and enforceable unle
has been reviewed by a court at the conclusion of a lawsuit. But if you want to try to avoid having a ju
make that determination for you, there are a few things you should be aware of.
Under contract law, for a contract to be valid and enforceable, there are a number of basic requirem
concerning the SUBSTANCE of the contract (i.e. the terms and conditions of the actual contract) and
PROCESS of how the contract was entered into (e.g. was it entered into fairly and freely?). If there
issues with either the SUBSTANCE and/or the PROCESS of how it was entered into, then the contract ca
challenged in whole or in part. Having a lawyer on hand may help to mitigate these and other issues from
get go. In what is to follow, SOME of the more common ways in which contracts can be challenged wi
discussed. Bear in mind, however, that there ARE MANY OTHER WAYS a contract can be challen
For example, a statute may have minimal requirements that need to be met in order for a legal form to
valid. For example, the Ontario Substitute Decisions Act, 1992 states that witnesses are required for
signing of a Continuing Power of Attorney for Property and specifies who cannot be a witness. That’s
one tiny example. At the end of the day, you should always speak to a lawyer about your particular situa
to mitigate against potential challenges. So here we go…
Clear, Complete, and Certain Terms
First, the terms that are in the contract itself must be clear, complete, and certain enough to be enforcea
Long-winded, incomplete, and vague terms can be challenged and perhaps rendered invalid unenforceable by a court. So if you’re adding provisions of your own to a legal form, always ask your
“Is this term or condition clear enough for a reasonable person to understand?” and “Are important term
such as price, timeline, consequences, etc. – missing”? Worth noting is that an agreement to agree a
some critical part of the contract at a future time could also be challenged and struck down by a court
significant terms are left out of a contract and the parties simply agree to come up with an agreement a
them later, then the entire contract may be challenged! An agreement to agree is generally not enforceabl
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Is My Legal Form Valid and Enforceable? Page 5 o
Overall, while there are MANY OTHER WAYS to challenge the actual SUBSTANCE of a contract, som
the more common ways are noted above. It is always recommended to speak with a lawyer (e.g. make a
on Dynamic Lawyers) if you have any questions about the substance of your legal form – particular
you’re modifying the template yourself! Now onto the PROCESS of entering into the contract.
Duress
DURESS is a legal doctrine that allows a party to challenge an agreement on the basis that they wer
seriously coerced by another’s party’s illegitimate exercise of power such that they could not freely con
to entering into the agreement. Examples of duress include threats or acts that are unlawful (e.g. crim
tortuous, breaches of contract, etc.) or illegitimate (e.g. threatening to refuse to enter into a contract o
terminate a contract lawfully unless…). Basically, if there’s some kind of unlawful or illegitimate pres
that isn’t in the normal course of market forces, then it could amount to duress. Specific examples c
include:
A party threatening another party’s life or limb unless they enter into an agreement; A party threatening to sue another party unless they enter into an agreement; and
A party threatening to call the police on another party unless they enter into an agreement.
Undue Influence
UNDUE INFLUENCE is similar to duress as it is concerned with the adequacy of a party’s consent to e
into the agreement. Unlike DURESS, however, undue influence may exist without violence or threa
violence against a party. Undue influence depends on the RELATIONSHIP between the parties w
causes one party to confide in the other and leads the other to take advantage and exert a natural influ
over the other. Undue influence can be used to challenge a contract on the basis that a weaker party
dominated by or unduly influenced by the other party. Examples of relationships that could lea
challenging contracts based on undue influence include: doctor-patient, parent-child, trustee-benefic
priest-churchgoer, etc. So there’s a special relationship that involves trust, confidence and influence. To
around this type of challenge, a party could try to argue that the other party received full disclosure,
independent legal advice, and had only a minor disadvantage when it came to unequal power.