How to Break a Sales Contract (in Ontario)

Whether they impact you personally, or whether you need to review contracts on occasion as part of your job (if so, hopefully your employer has deep enough pockets to retain lawyers to provide such services from time to time), everyone at some point in time or another will have contracts put before them, with the expectation that they'll sign on the dotted line.

When we first moved into our house, I was amazed at how many people would come up to our door trying to sell us something – they were more ubiquitous than telemarketers. Each of them had a contract in hand and a pitch on their lips that was pretty compelling, more often than not.
Even though I consider myself to be somewhat savvy about such things, I even fell for it once. Here's a cautionary tale for you: Until we lived here, we generally lived in apartments where sales people generally didn't have access to our front door. Looking back, that was definitely my weakness #1: I was (and I still am in many ways) decidedly inexperienced about all the paperwork that seems to follow homeowners.

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We had just moved in. I was very busy trying to manage my business and unpack the house at the same time. (It took over a month to pack up – why I ever imagined that it would only take a week to unpack, I'll never know.) I was also quite pregnant, which can do funny things to your cognitive function.

During this time, a sales guy came to the front door to convince me that I needed to sign up for fixed energy rates. (We were approached by a LOT of people like this at that time – I can't prove it, obviously, but I suspect Canada Post sold us out when we did that change of address thing.**) He made it sound like it was something I had to do – choose an energy provider. At the time, it sounded like just another decision or to-do list item that I needed to manage. I admit it: During this moment of weakness, I signed without reading or having any clue about what I was agreeing to.

**Perhaps of interest: It's been shown that people's purchasing habits, etc. are relatively fixed except at certain transition points in their lives – moving is one. Having a baby is another. This is why you'll almost certainly be bombarded by advertising at these two points in your life. A lot of it is far more targeted that you might ever realize. The New York Times did an article on this recently, entitled How Companies Learn Your Secrets. It's fascinating reading if you're interested.

Signing that agreement was a dumb move, to be sure. Happily, after reading the thing later that night, and realizing that it was ridiculous to agree to fixed energy prices when we didn't have any sense of what our energy costs were to begin with, I was able to invoke my right to cancel within 10 days. (Note: We live in Ontario – since contract law is governed provincially, be sensible and check the rules in your own jurisdiction before assuming you'll have the same latitude.)

According to Ontario contract lawyer, Paul Willis, and the Ontario Ministry of Consumer Affairs as well, if you make a purchase or sign a contract in your home and then change your mind, if the deal is worth more than $50, you have the right to cancel within 10 days. In my case with the energy contract, I simply called to cancel. Willis, though, recommends making any cancelations in writing. (The ministry appears to agree, and even provides sample cancellation letters for consumers to use in such situations.)

In Ontario, the same rule applies to new property or condo purchases, but not to the sale of new homes.

"One of the things you want written into your contract is a cooling-off period," says Willis. "If you've gone to a store or a real estate office, if there isn't something in the document that gives you a cooling off period, you don't necessarily have it. If something really matters to you," he adds, "you've got to get that spelled out in the contract as well."

Beyond door-to-door sales of fixed energy rates or hot water heaters, contracts are everywhere, whether you recognize them as such or not.

Certain contracts – family law agreements, for example – require that both parties have lawyers involved at some point to ensure that everyone understands what is being signed.

As for the rest – forget for a moment all of those end-user agreements, and other contracts you'll scroll through before clicking 'accept' online (it's been found that it would take the average Internet user about 76 days to read all their privacy policies) – there are also employment contracts, insurance contracts, confidentiality agreements, service agreements and so many more, it's a wonder there aren't more lawyers out there offering low-end (read: affordable) day-to-day contract review services.


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Next up, we get Willis to break down a few contract law basics and provide tips on what to look for in a contract. Keep reading!


Kate McCaffery is a freelance writer, editor and former urbanite, now living somewhere in between the lake, the ski hill and some farmer's cow path. Visit mccaffery.ca/kate2.0/ for more information.