The Saskatchewan Court of King's Bench recently confirmed that a contract may still be legally binding even if the identity of one of the parties is not clearly stated in the contract.
InAgrocorp Processing Ltd. v G.F. Farms Ltd., there was a written agreement between the plaintiff, a purchaser, and the defendant, a farmer. The farmer had agreed to sell lentils to the purchaser. However, the contract identified the purchaser, whose full legal name is Agrocorp Holdings International Inc., as "Agrocorp International". The farmer did not deliver the lentils, and when the purchaser sued, the farmer argued that the contract was not enforceable because the entity buying the lentils was not correctly identified. The farmer also referenced Saskatchewan'sBusiness Corporations Act, which requires that a corporation clearly state its name in all contracts.
Justice Keene of the Saskatchewan Court of King's Bench ruled in favour of the purchaser, holding that the contract was indeed valid. He determined that the requirement in Saskatchewan'sBusiness Corporations Act to include the name of the corporation in all contracts is intended to ensure the other party knows whether they are dealing with an individual or a corporation. In this case, the evidence showed the farmer knew it was dealing with a corporation. Furthermore, the evidence indicated that the farmer would have known it was dealing with Agrocorp Holdings International Inc. specifically since it had previously entered contracts with "Agrocorp International" and received payments from Agrocorp Holdings International Inc.
Justice Keene also reviewed the law on what constitutes the creation and enforcement of a contract. He noted that a contract is enforceable if a reasonable and objective bystander, aware of all the circumstances, would believe that the parties intended to create a contract, the parties agreed on all essential terms, and the essential terms were sufficiently certain. While the identity of the parties is an essential term, in this case, the identity of the purchaser was sufficiently certain in the circumstances.
This case serves as a reminder that courts approach contracts in a practical manner, upholding the intentions of the parties involved, even if the contract is imperfectly drafted. It underscores the importance of seeking legal advice when questions about the enforceability of an agreement arise, as prompt and accurate guidance can save time and expense.
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