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Contracts - Unilateral versus Bilateral. Jesan Real Estate Ltd. v. Doyle
In Jesan Real Estate Ltd. v. Doyle (Ont CA, 2020) the Court of Appeal considered the distinction between a unilateral contract and a bilateral contract:[27] Because the contract is an option to purchase, the application judge referred to the decision of the Supreme Court of Canada in Sail, where the court explained that while an option is often viewed as a unilateral contract where the conditions for exercise must be strictly complied with, if the option is closely linked with another contract between the parties, then it is a bilateral contract which requires only substantial performance of the conditions to be enforceable. However, the substantial non-performance doctrine is always subject to the express terms of the contract. In Sail, at para. 50, the court explained:Having found that the option in the present case is a clause of the bilateral charter party, it must next be determined whether the parties have expressly provided for literal and strict enforcement of any or all of the terms of this contract. Courts will generally give effect to the parties’ intentions by upholding any clear contractual provisions which provide that the breach of a certain term, no matter how slight, will justify rescission of the entire contract by the non-offending party [Waddams, pp. 400-401; Treitel, pp. 694-95; Lombard North Central plc v. Butterwort, [1987] Q.B. 527 (Eng. C.A.) ]. If the parties have made no such provisions, the bilateral nature of the contract in the present case will require that this Court apply the substantial non-performance doctrine. [28] Therefore, if the OPA is part of a bilateral agreement, to which the doctrine of substantial non-performance would generally apply, in order to assess whether Mr. Doyle’s non-compliance with the requirements for exercising the option amounted to a breach of the OPA that allowed Jesan to reject the exercise of the option, the court was required to read the OPA to determine its requirements and whether there are any provisions that speak to strict performance of the contract, or, conversely, that allow for some leeway in performance of the contractual obligations.
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