A recent decision of the Ontario Court of Appeal drives home once again the title of this blog: put intentions in writing.
The case of Mountain v. Mountain Estate 2012 ONCA 806 is the sad story of what happens when people rely on an oral contract to handle complex business transactions. In the Mountain case, a son relied on the Oral Contact between him and his parents that he would receive the family dairy farm if he worked on it after school, rather than pursuing his own farm or career. The father died without putting this in his will and the son did not obtain a written contract when he and his parents came to this agreement in 1977.
The son now has had to sue his father’s estate: the emotional let alone legal costs of this are no doubt massive. The Court of Appeal decision referred the case back to a trial, so the legal fees will just keep piling up without any resolution in the near future.
Lately our firm has heard from many people indicating it is their preference to do business on a handshake. Some appear to believe this is cheaper than using a lawyer: it is not.
If you are going into business with someone who will not commit to putting the terms of that business in writing and signing it you have to wonder why. Is this person being truthful or are they intending to avoid their promises to you? Even if the person is being truthful, memories fade and details are forgotten or recalled differently by the parties.
The worst situation when dealing with an oral agreement is the death of one of the parties – now you’re dealing with the grieving estate who may not have any knowledge of the agreement and litigation will prevail.
It is far cheaper to have a lawyer to create a contract at the start of a relationship when everyone is happy, than to pay a lawyer to litigation the intention when everyone is angry.
Enough of the oral contract days – get it in writing, it’s cheaper.