A recent decision from the Toronto Small Claims Court involving verbal contracts and the enforcement of those contracts has the potential to change the way consumers deal with corporations in Ontario.
David Ramsay contacted Bell Canada and entered into a verbal contract with Bell for its services through their Call Centre. The price was fixed for a term of 24 months. Shortly after the telephone call and the agreement was made, Bell emailed David contract terms that were different than what he agreed to, in addition to an increase to the costs of their services.
David paid the difference, for two years, despite David’s objections he had a verbal agreement for an amount less than what was being charged. He complained to the Commission for Complaints for Telecom-Television Services, who refused to interfere claiming Bell was entitled to change the terms of the agreement whenever they wanted.
The Toronto Small Claims Court disagreed. David was able to obtain a copy of the transcript of his telephone call with the Call Centre employee who confirmed the cost for the services was the amount David advised they were, and not what Bell was claiming.
Bell’s argument was that they impose new terms and change the prices for their services whenever they wanted, because the terms state that Bell can do that.
The Deputy Judge found that by Bell attempting to impose new terms after a verbal agreement guaranteeing a monthly price for a 24 month term was “high handed, arbitrary and unacceptable,” and any imposition of new terms is unenforceable.
Bell Canada had attempted to settle this matter out of Court with David for some time prior to proceeding to Trial, most likely to prevent this matter from going public, without success.
This Decision, although in Small Claims Court may have further implications on companies like Bell in the future.
Although David was awarded significantly less than what Bell offered him, what he did will most likely change the way consumers deal with telecommunication companies moving forward.
If you enter into a contract and that contract is for a fixed term, the terms of that contract cannot be changed during that term, and if one party attempts to impose new terms, those terms will be unenforceable.
Murray Brown, Licensed Paralegal