Reference Library
Contract Law Terms Explained
Short, plain-English definitions for the terms that come up most often across Ontario contract disputes, leases, partnerships and agreements.
FreeConsultation Available
BA, JDSite Managed by Ryan Manilla
15+ yrsAt Ontario Bar
Glossary
Contract Disputes
- Breach of contract
- A failure, without lawful excuse, to perform a promise or obligation set out in an agreement.
- Material breach
- A significant failure to perform that goes to the heart of the agreement.
- Demand letter
- A formal written request asking another party to fix a breach or pay an amount owed by a set deadline.
- Limitation period
- The window of time within which a legal claim must generally be started.
- Damages
- Financial compensation a court may award to address loss caused by a breach.
- Mitigation
- The reasonable steps a non-breaching party is expected to take to limit their own losses.
- Specific performance
- A court order requiring a party to actually carry out its contractual obligations.
- Mediation
- A process where a neutral third party helps both sides negotiate their own resolution.
- Arbitration
- A private process where a neutral decision-maker issues a ruling on a dispute.
Glossary
Agreements
- Consideration
- Something of value exchanged between parties that helps make a promise legally binding.
- Offer and acceptance
- The proposal of clear terms by one party and the unqualified agreement of the other.
- Indemnity
- A clause where one party agrees to cover certain losses or costs incurred by the other.
- Non-compete
- A clause restricting a party from competing with the other for a period of time.
- Non-disclosure agreement
- An agreement that restricts how confidential information may be used or shared.
- Termination clause
- A provision setting out how and when a contract may be ended by either party.
- Verbal agreement
- An agreement formed through spoken words rather than a signed written document.
- Settlement agreement
- A negotiated agreement that resolves a dispute, usually including a release of further claims.
Glossary
Leases
- Assignment
- Transferring your rights or obligations under a lease or contract to another party.
- Sublease
- An arrangement where a tenant rents all or part of their leased space to another party.
- Renewal option
- A right, but not an obligation, allowing a tenant to extend a lease on specified terms.
- Net lease
- A lease structure where the tenant pays base rent plus a share of property costs separately.
- Quiet enjoyment
- A tenant's right to use leased space without unreasonable interference from the landlord.
- Default (lease)
- A failure by a tenant or landlord to meet an obligation required under the lease.
Glossary
Partnerships
- Fiduciary duty
- A duty of good faith and loyalty owed by partners to one another in partnership business.
- Dissolution
- The formal winding up and ending of a partnership or business relationship.
- Buy-sell provision
- A clause setting out how a departing partner's interest will be valued and bought out.
Glossary
Money & Enforcement
- Judgment
- A court's formal decision confirming what one party owes to another.
- Garnishment
- A legal process directing a third party, like an employer or bank, to redirect funds toward a debt.
- Writ of seizure and sale
- An enforcement tool allowing a creditor to have a debtor's property seized and sold.
- Judgment debtor
- The party who owes money under a court judgment.
Understand your agreement. Know your next step.
Ontario-wide, plain-English contract law information — built to help you make sense of your situation before you decide what to do next.