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In the eye of a Hurricane, there are quietly unexercised stock options

Co-authors:  Brendan Sheehan and Rajah Lehal   Introduction The case of Hibberd v. Hurricane Hydrocarbons Ltd. involved various issues regarding many stock options that were not exe...

Director Disclosure of Interest

Discussion: The purpose of the Municipal Conflict of Interest Act (the Act) is to prohibit members of councils and local boards from engaging in the decision-making process in respect to matters in ...

Breaking the law could breach your insurance agreement

This case highlights what it means to act reasonably when defending against a strict liability offence. The defendant violated a statutory condition of his car insurance policy by driving the automob...

Errors in your filing can lead to stress

Discussion: This case emphasizes the importance of knowing who your counterparty is, in the event that you decide to litigate. Although the plaintiff in this case was permitted to add the correct par...

Is there a duty of good faith bargaining in the context of an RFP?

Duty to Bargain in Good Faith: It is well established that there is NO duty to bargain in good faith unless: (a) a duty expressly arises through contract; or (b) in the commercial tendering process ...

Shoppers Drug Mart Inc. v. Ontario (Minister of Health and Long-Term Care) (2011, Ont CA)

Discusssion: This was an appeal of two orders of the Divisional Court declaring that the provisions in the Drug Interchangeability and Dispensing Fee Act (the DIDFA) and the Ontario Drug Benefits Ac...

Shoppers Drug Mart Inc. v. Ontario (Minister of Health and Long-Term Care) (2011, Ont CA)

Discusssion: This was an appeal of two orders of the Divisional Court declaring that the provisions in the Drug Interchangeability and Dispensing Fee Act (the DIDFAâ) and the Ontario Drug Benefits Ac...

“Unfair” agreements may be rejected by the court

Obtain independent legal advice to ensure that you are not entering into an unconscionable transaction/agreement. Generally, when a signor signs a contract, they are bound by it. However, courts have...

Knowledge is treated differently than action for public policy

Generally, the courts have stated that they will not lend their aid to a person whose claim is based upon an immoral or illegal act. However, the courts may lend aid to a person whose contract has so...

Contracts contrary to personal interests can be voided

Contracts contrary to personal interests may be found to be contrary to public policy, and voided by the court. For example, in an American case called. In the Matter of Baby M [1988 NJ SC], a woma...

Contracts contrary to public policy from a statue

Ensure that you have understood all the rules, regulations, statues, and law that apply to your business before entering into any contracts. Hire counsel if necessary. Historically, courts have refus...

Claims of oppression

The registered holder and beneficial owner of a security can make an application to the court to give it a standing oppression claim. For example, in Gandalman Investments Inc. v. Fogle, 52 O.R. (2d)...

Damages in the event of misrepresentation

When an individual makes statements that have the purpose of inducing an individual to enter into a contract, then a representation (a convincing statement) and possibly a warranty (a guarantee of a p...

Information in a brochure can be held against a seller

Information within a manufacturer's brochure can act as a warranty. In several scenarios, the manufacturer will not be a party to the written contract; however, if the manufacturer publishes a brochur...

No contract without a meeting of the minds

A contract only exists with consensus ad idem, a common understanding between parties during the formation of the contract. This condition is a necessary requirement to the formation of a contract. I...

Issuing dates of employee stock option plans

To avoid confusion, stipulate the date the agreement is to take effect into the agreement. It should also be indicated that this is the date that will be used to determine the price of the stock optio...

Reporting Requirements of Employee Stock Option Plans for Banks

If a bank has an automatic exercise of options program, they may be able to evade the insider reporting requirements (section 91 of the Securities Act) in respect to the sale of common shares of the B...

Stipulating classes of shares under Employee Stock Option Plans

In the company's articles, explicitly provide which class of shares is to be issued under the Employee Stock Option Plan (ESOP). Also, ensure that redemption rules for all classes of shares are clea...

Required consideration for an ESOP

When issuing an ESOP, ensure that the proper consideration (money, property, or past services) is received and recorded. Even if the ESOP is issued on the basis of a loan provision, consideration must...

Mandatory ESOPs

Ensure employees have sufficient knowledge about a mandatory Employee Stock Option Plans (ESOP). If the ESOP becomes mandatory, ensure that employees are given sufficient notice and are well aware o...

You may be liable for expenses when a contract is broken

Expenses accrued prior to the formation of the contract RELIANCE OR CONSEQUENTIAL DAMAGES (SHOULD BE LIMITED) When two or parties enter into a contract, which is subsequently broken, the parties tha...

Distinct actions or representations are required in order to waive the strict language of a contract

Discussion: A party can waive the strict language of a contract where, by its actions or representations, it leads the other to believe that those contractual rights will not be enforced. In Tas-Mari ...

Agents and employees, watch out! It’s all in the hands of the principal…

When drafting a limitation of liability clause, ensure that all persons who may be covered by the liability exemption clause are included and specify the degree of coverage. Courts have stated that...

Concept of “novation” to transfer a liability to another party

In Re Temple (2012, Ont SC), the applicant lent money to Temple (an individual) in 2005. The debt was due in 2006, and the last payment was made in November 2007. The applicant brought an application ...

"Unfair" agreements may be rejected by the court

Obtain independent legal advice to ensure that you are not entering into an unconscionable transaction/agreement. Generally, when a signer signs a contract, they are bound by it. However, courts ha...
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