Breach of Contract Disputes - ND PARALEGAL SERVICES

ONTARIO CONTRACT LAW

What Is a Breach of Contract — and What Can You Do?

A breach of contract occurs when one party to a legally binding agreement fails to fulfil a material obligation under that agreement — without a lawful excuse. This can range from a contractor abandoning a renovation mid-project, to a client refusing to pay for services rendered, to a supplier delivering defective goods.

In Ontario, parties to a contract dispute can pursue remedies through the Small Claims Court for claims up to $35,000. The court can award monetary damages — compensation for your actual financial loss caused by the breach — and in appropriate cases, the return of a deposit or payment already made.

Types of Breach We Handle

Breach of contract disputes arise in almost every area of everyday life. These are the situations we most commonly see in Ontario Small Claims Court.

Defective or Incomplete Work

A contractor, tradesperson, or service provider fails to complete the agreed work, delivers substandard results, or abandons the job before completion — leaving you out of pocket and without what you paid for.

Defective Goods

A supplier or seller delivers goods that do not conform to the agreed specifications, are defective, or fail to work as warranted — breaching implied or express warranties under Ontario law.

Misrepresentation Inducing Contract

You entered the contract based on false statements made by the other party about the product, service, their qualifications, or the scope of what would be delivered.

Refusal to Pay for Completed Services

A client receives and benefits from the work or goods but refuses to pay the agreed price — often manufacturing complaints about quality to avoid their payment obligation.

Non-Delivery of Goods or Services

You paid in advance — for goods, a service package, or a deposit — and the other party never delivered what was promised or disappeared entirely.

Anticipatory Breach

Before performance is due, the other party makes clear they will not perform — through words or conduct. You don’t have to wait for the breach to occur before taking legal action.

Remedies for Breach of Contract

Expectation Damages

Compensation for the benefit you expected to receive from the contract — typically the difference between what was promised and what was delivered, or the cost to complete or repair the deficient work.

Return of Deposits & Prepayments

Recovery of money paid upfront — deposits, retainers, or advance payments — where the other party failed to perform their obligations in return for that payment.

Cost of Remedy

The reasonable cost of having the deficient work corrected or redone by another contractor — supported by quotes or invoices from a replacement service provider.

Consequential Losses

Where the breach caused losses beyond the direct contract value — such as lost business income, additional expenses incurred, or costs flowing directly from the failure to perform — these may be recoverable if foreseeable.

Pre-Judgment Interest

Interest on the amount owed from the date the cause of action arose — calculated under the Courts of Justice Act or at the rate specified in the contract.

Court Costs & Fees

The filing fee and representation costs (up to 15% of the amount claimed) are recoverable from the losing party if you succeed at trial — partially offsetting the cost of pursuing the claim.

Frequently Asked Questions

In Ontario, most contracts do not need to be in writing to be legally enforceable. Oral contracts are valid and can be proven through the parties’ conduct, communications, and witnesses. That said, written contracts are significantly easier to enforce — the terms are clear and unambiguous, and there is less room for dispute about what was agreed. If you are relying on an oral agreement, thorough documentation of supporting evidence is essential.

If a contractor delivered defective or incomplete work, you can typically claim the cost of having the work properly completed or repaired by another contractor — supported by quotes or invoices. You may also claim the return of any portion of the contract price that was paid in excess of the value received. Consequential losses caused by the defective work may also be recoverable if they were foreseeable at the time the contract was made.

Yes — but the strength of your case depends on the evidence available to prove the agreement existed and what its terms were. Text messages, emails, social media messages, invoices, and witness testimony can all be used to establish an oral agreement. We assess the evidence you have and advise honestly on the viability of your claim before you invest time and money in a proceeding.

In Ontario, a party who suffers a breach of contract has a duty to take reasonable steps to reduce their losses. For example, if a contractor abandons your renovation, you cannot simply leave the work unfinished for months and then claim all the accumulating losses — you must make reasonable efforts to hire a replacement. Failure to mitigate does not eliminate your claim, but it can reduce the damages you are entitled to recover. We help clients document their mitigation efforts to protect the full value of their claim.

Ontario’s Small Claims Court can only award monetary remedies — it cannot order a party to perform a contract (specific performance) or issue injunctions. For claims involving unique goods or situations requiring specific performance, the Superior Court of Justice has jurisdiction, but the costs and complexity are significantly higher. In most everyday breach of contract situations, a monetary award is the practical and appropriate remedy — and Small Claims Court is the right forum.

Under Ontario’s Limitations Act, 2002, you generally have two years from the date the breach occurred—or the date you reasonably discovered your loss—to start a legal proceeding. Failing to file your Plaintiff’s Claim within this two-year window can permanently bar you from recovering financial damages through the courts.