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Sometimes, one mistake leads to another. A Toronto law firm was recently hit with a $40,000 damages award for failing to advise their former client that she consider receiving advice on how to invest the $1.1 million they held in trust for her. But that was not the end of the story. The law firm also neglected to attend to even the most basic legal ‘details’ surrounding a consulting agreement entered into by the client.

A pharmacy owner in a small town sold the pharmacy to Shopper’s Drug Mart and agreed to a consulting contract to help with the transition. The consulting agreement stipulated that the contract could be terminated only by registered letter. The consultant took a day off and was advised by her lawyer that the company had terminated her contract. It was at that point that her lawyer advised her that the company was not in breach of the contract because… it had never signed the agreement! The lawyer was found liable for negligence, and damages were awarded for failing to advise the client that she needed to give directions about investing funds held in trust by the law firm, and for failing to finalize a lease agreement for a software assignment.

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Take away:

  • Make sure the parties execute the contract.


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