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Wood v Fred Deeley Imports Ltd.

Contract enforceability: Signing the employment contract prior to the start date

When an employee is terminated without cause and offered a package that is very modest, but otherwise compliant with the employment contract, a common first step for his or her lawyer will be to see if the contract can be set aside. If the contract can be declared void, the employee can try to pursue the typically much greater common law damages. There are several grounds upon which courts have set aside either the full contract or at the least, the termination provision. This blog post will focus on the issue of signing the contract prior to the start date.

 

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Wood vs. Oudin: Clarity in termination provisions

In Wood v Fred Deeley Imports Ltd., the Ontario Court of Appeal seemed to make a definitive statement about the interpretation of termination provisions in employment agreements: a court will invalidate them when they contain actual or technical deficiencies. However, the same Court’s decision last year in Oudin v Centre Francophone de Toronto seemed to reach a different conclusion: the court will apply contractual certainty to give effect to the parties’ intentions. Can the two be reconciled? Closer inspection reveals that each decision is specific to the employment agreements in each.

 

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