Contracts are the backbone of many business relationships, service arrangements, leases, and employment agreements. But what happens when one party fails to deliver on their promise?
At Prudent Law, we’ve guided numerous individuals and businesses through contract disruptions. In this guide, our contract dispute lawyers explain what constitutes a breach of contract, the types of breaches, the remedies available under Ontario law, and the steps you should take if you believe a breach has occurred.
What Is a Breach of Contract?
A contract is a legally binding agreement between parties that sets out obligations each must fulfil—such as providing services, making payments, delivering goods. To be valid in Ontario, a contract typically requires offer, acceptance, consideration, intention to create legal relations and capacity.
A breach of contract occurs when one party fails to perform their obligations as set out under the agreement. This can be through refusal, delay, incomplete performance, or failing to meet agreed standards.
In practical terms, imagine you enter into a service agreement and the other party fails to deliver by the deadline or delivers below the required standard: that may give rise to a breach of contract and allow you to pursue legal rights. It is crucial to review the specific contract terms to determine exactly which obligations were promised, and whether the non-performance amounts to a breach.
Types of Contract Breaches
Minor (Partial) Breach
A minor or partial breach happens when the breaching party fails to perform some part of the contract, but the essential obligations remain intact. For example, a supplier delivers 90 % of the goods on time, but 10 % are missing. The contract remains in force, and the non-breaching party may claim damages for the incomplete portion, but usually cannot terminate the entire contract.
Material (Fundamental) Breach
A material breach occurs when the non-performance goes to the heart of the contract — the obligation broken is so substantial that it deprives the non-breaching party of the benefit they expected. In such instances, the non-breaching party may treat the contract as terminated and sue for damages.
For example: non-payment of the full amount for services rendered, or a contractor completely abandoning the build halfway through.
Anticipatory Breach
An anticipatory breach happens when one party indicates—before performance is due—that they will not fulfil their contractual obligations. In Ontario law, the innocent party may treat that as a breach and either sue immediately or wait until actual performance is due. This gives a non-breaching party the opportunity to act early rather than wait until further damage occurs.
Legal Remedies for Breach of Contract in Ontario
When a breach has occurred, affected parties have several potential remedies under Ontario law:
Monetary Damages
This is the most common remedy. Damages are intended to put the non-breaching party in the position they would have been if the contract had been performed. They can include compensatory damages (for direct loss), consequential damages (for indirect loss) and sometimes nominal damages (where a breach occurred but no measurable loss was proven).
Specific Performance
In limited situations—often involving unique goods or real estate—the court may order the breaching party to perform their contractual obligation rather than simply pay money. Specific performance is discretionary and depends on the context and fairness of the remedy.
Rescission and Restitution
Rescission cancels the contract and restores the parties to their pre-contract positions. Restitution requires the breaching party to return any benefit obtained under the contract. This remedy may apply where the contract was voidable due to misrepresentation, mistake or where the obligation is impossible to perform.
Courts determine which remedy is appropriate based on the contract terms, evidence of the breach, and the losses incurred by the non-breaching party.
Also read: What Does A Real Estate Lawyer Do?
How Courts Determine if a Breach Has Occurred
Ontario Courts (for example, the Ontario Superior Court of Justice) will assess the following when determining whether a breach has occurred:
- Interpretation of the contract: What did the parties explicitly agree to? Clear, unambiguous terms favour enforceability.
- Evidence of non-performance: Did one party fail to meet obligations on time, completely or to the agreed standard?
- Intent and conduct of the parties: Was the failure deliberate or negligent? Was there an excuse (force majeure, frustration)?
- Whether the non-breaching party suffered loss as a consequence of the breach.
Strong documentation—written agreements, emails, change orders, performance reports—will assist in proving the breach. That is why having a well-drafted contract is often your first line of defence.
Steps to Take If You Believe a Breach Has Occurred
Review the Contract Terms: Confirm the exact obligations of each party, deadlines, performance standards, dispute resolution clauses or termination clauses.
Communicate with the Other Party: Address the issue in writing. Sometimes breaches occur because of miscommunication or logistical issues that can be resolved before escalating to litigation.
Document All Interactions and Losses: Keep records of emails, letters, notes of meetings, invoices, cancelled orders, missed opportunities. Document the harm you’ve suffered because of the breach.
Seek Legal Advice Early: Consulting a contract dispute lawyer in Ontario can help clarify your rights, assess the strength of your matter, explore negotiation or mediation and guide you on whether to pursue court action.
By acting promptly, you protect your rights—and often avoid larger losses.
How a Contract Dispute Lawyer Can Help
At Prudent Law, our contract dispute lawyers works with individuals, small businesses, and larger organisations across Ontario to:
- Interpret your contractual rights and obligations
- Identify whether a breach has occurred and what remedies are available
- Negotiate settlements or represent you in court
- Draft, review or revise contracts to minimise future risk
If you suspect a contract has been breached, or you want to protect yourself from future disputes, contact us for a free initial consultation. We’ll provide straightforward, clear, and practical advice—without legal jargon.
Preventing Future Contract Disputes
Prevention is often better than cure. Here are practical steps you can adopt to reduce the risk of contract disputes:
- Ensure your contract clearly defines obligations, deadlines, and performance standards.
- Include dispute resolution clauses (mediation, arbitration) to avoid costly litigation.
- Maintain regular review of contracts—especially when business conditions change.
- Engage legal counsel to draft or review agreements before signing.
By taking these proactive steps, you protect your business and save time, money and stress down the line.
Protect Your Rights in a Breach of Contract Case
When a contract is breached, your rights matter—and so does timely action. Whether you are dealing with a supplier, customer, contractor or business partner, you don’t need to face the dispute alone.
If you’re dealing with a potential breach of contract, reach out to Prudent Law today. Let our experienced contract dispute lawyers help you navigate your options and secure the outcome you deserve.
Call 905-361-9789 or contact us online to schedule your free consultation.
