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Should you leave?

Question: How do I interpret a Contract to know if there has been a "breach of contract"?

Answer: From the words drafted. Global News reported a recent decision by an Ontario Court that decided a claim for specific performance of a lease by the Bellwoods Brewery against its landlord. This court confirmed how a contract is interpreted in Ontario.

Bellwoods signed a 20-year lease for part but not all of a building; the Landlord would continue to use the part not being leased. Despite the detailed wording drafted with the help of lawyers as well as realtors, the landlord disputed that the word "vacate" meant he had to leave the leased premises completely.

The Court applied the established principles of contract interpretation and quoted Justice Laskin in the case Thunder Bay (City) v. Canadian National Railway Company, 2018 ONCA 517 at paragraph 30: "The overriding principle is that the meaning of an agreement and the intent of the parties in entering into it must be derived from the words the parties used and the context in which they used those words...the factual matrix – almost always matters because words rarely have meaning apart from their context."

Further, it is the factual and objective context at the time the contract was drafted, not the subjective and subsequent interpretation of the Parties. The objective meaning of the actual wording used in the contract is what applies to determine if there has been a breach. The landlord was in breach for failing to vacate.

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