In this recent court ruling, a renovation contractor was denied any recovery, in part because the contract entered into with the homeowner was simply too vague in detail to be capable of enforcement. The vagueness was only compounded by the fact that the contract was verbal only, and hence subject to much disagreement over what was agreed to.
The foreshadowing by the judge is quite telling, and serves as a poignant warning to contracting parties (whether it be home renovations or otherwise):
“… (this judgment) … serves as a reminder to all homeowners and contractors of the potential pitfalls of entering into construction agreements with nothing but an oral agreement.”
Although it is common in contract dispute cases for judges to consider awarding compensation on a quantum meruit basis (ie: to allow the person providing the good or service to be paid a fair and just amount for the value that they provided, even if the product or service fell short of the mark). But in this instance, the contractor failed to bring forward sufficient evidence to demonstrate that the services they provided exceeded the amounts paid by the homeowner (through several installments before the work ceased).
There is no fixed definition for when a contract becomes too vague, and each case will be decided on the prevailing facts, however there is no debate that the best protection is to enter into a contract that, at a minimum, clearly outlines who the parties are, specifies the scope of work, and defines the price. Obviously fuller details are better, such as: when payments are due, milestones for the project, consequences of defaults, etc.
In this case however, there was no agreement on who the contracting parties were, what amount was to be paid, when the work was to be completed, or how the work was to be done (ie; the scope of the work). In this situation, there was no enforceable contract: the terms were simply too vague to be capable of enforcement.
Despite the result in this case, verbal contracts are indeed enforceable (see for example my news post entitled “Verbal Contract can be Just as Enforceable as a Written Contract“), and the courts routinely enforce verbal contracts provided they contain the requisite detail, but the frailty of proceeding with a verbal contract becomes obvious when the parties dispute the terms of a verbal contract later down the road. Best practice demands that parties commit their agreement into writing so as to avoid the pitfalls that can arise when a verbal contract is later challenged. It obviously takes more energy to commit an agreement into writing, however the thirty (30) minutes it may take to put pen-to-paper at the beginning can save countless hours and expense when things go wrong down the road.
Radhi v Ajram, 2022 CanLII 106829 (ON SCSM)
https://www.canlii.org/en/on/onscsm/doc/2022/2022canlii106829/2022canlii106829.html