Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Share on twitter
Share on facebook
Share on linkedin

Taking them at their word? The validity of verbal contracts

Share on twitter
Share on facebook
Share on linkedin
Share on email

Taking them at their word? The validity of verbal contracts

Posted May 7, 2018

Ramsay v BCE Inc.

The Toronto Small Claims Court recently found that a telephone conversation between an individual consumer and Bell Canada constitutes a legally enforceable oral contract – one which cannot be superseded by written terms emailed after the fact.

In David Ramsay v BCE Inc. the Plaintiff Mr. Ramsay called Bell Canada and ultimately purchased internet and television services for a term of 24 months. Having reached an agreement by phone, Bell Canada then sent Mr. Ramsay an email containing new terms including an increased price and an entire agreement clause.

Deputy Judge De Lucia found that when the telephone conversation concluded, a contract was in place with all of the essential elements, including consideration and sufficiently clear terms. Bell Canada’s later attempt to unilaterally raise the agreed-upon price was thus in violation of a valid and enforceable contract.  A party to a contract cannot unilaterally insert new terms without fresh consideration.  Where new terms involve price increases, any attempt to unilaterally change the verbal contract will be considered high handed and unacceptable by the Court.

The Court explained that while Bell Canada has the commercial right to impose price changes, it cannot do so during a contractual term.  The term in this case was 24 months, as agreed upon verbally between the parties.  Bell Canada’s attempt to clarify, introduce and bring attention to the new terms of the contract through subsequent emails was held to be unacceptable.  Given that none of the new terms were part of the original contract, they were found to be unenforceable.

Implications for Commercial Parties

Even though the damages award was low, the Small Claims Court’s reasoning should provide a caution to companies that engage consumers by telephone.  If your company contracts over the phone, it may not be possible to supersede the terms of the initial verbal contract with subsequent written terms.

For the sake of clarity and consistency, it is always best practice to reduce contracts to writing.  This holds especially true for companies that regularly contract with individual consumers. Employees who engage consumers by telephone should be trained to ensure best practices are followed at every consumer interaction.  Ensuring contracting protocols are followed at each consumer interaction will reduce the likelihood of unexpected terms or liability for the corporation in the future.

Shauna Cant is a member of the Commercial Litigation team. She can be reached at 613-369-0359 or at shauna.cant@mannlawyers.com.

More Resources

Blog |
Business Law, Employment, Labour, and Human Rights

By: 

Posted January 21, 2022

Determining the Legal Structure of your Business When starting your business endeavour, the appropriate legal structure will depend on the nature of the business itself.[...]
Blog |
Practice Management

Posted January 20, 2022

Be yourself Imposter syndrome can affect us all but it can be particularly difficult to deal with as a law student at the outset of[...]
Blog |
Real Estate

By: 

Posted January 17, 2022

In a previous blog, I discussed the importance of having a financing condition when buying a property. While the focus of most people is on[...]
Blog |
Personal Injury

By: 

Posted January 14, 2022

CTV News recently did a story noting that the Omicron variant is causing a rapid increase in COVID-19 cases and hospitalizations while, at the same[...]
Blog |
Practice Management

By: 

Posted January 12, 2022

Arthur Ashe is credited with saying that one important key to success is self-confidence, and that another important key to self-confidence is preparation. Whether he[...]
Blog |
Employment, Labour, and Human Rights

By: 

Posted January 11, 2022

Not all Unions are created equal and not all Unions treat their members equitably. As labour lawyers, we often receive calls from employees who are[...]

Subscribe to Our Newsletter

Name*
Consent*
This field is for validation purposes and should be left unchanged.