Is Signing On The Line Really Final?

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Introduction

In M&A transactions, parties often expect the final purchase agreement to be a complete, self-contained statement of the agreed-upon terms. Yet, recent jurisprudence cautions that when drafting leaves uncertainty, courts may draw upon context outside the four corners of the definitive agreement to determine meaning.

The Ontario Superior Court's 2025 decision in Project Freeway provides valuable insight for M&A lawyers for multiple reasons. First, as discussed in our previous article, Not So Fast: Ontario Court Weighs In on Earnout Acceleration Clauses, the court provided guidance on whether certain post-closing transactions could trigger the acceleration of an earnout clause. Second, as we will discuss below, Project Freeway reminds lawyers that even a robust entire agreement clause ("EAC") in an M&A purchase agreement may not preclude a court from consulting the parties' initial letter