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ARTICLE · 14 JANUARY 2026

ONCA Affirms Denial Of Claim For Earn-Out Acceleration

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The Ontario Court of Appeal recently dismissed an appeal in Project Freeway Inc. v. ABC Technologies Inc., 2025 ONCA 855, affirming a prior decision of the Ontario Superior Court of Justice...

CanadaLitigation, Mediation & Arbitration
Drew C. Broughton
Drew C. Broughton
Jie (Kevin) Zhou
Jie (Kevin) Zhou
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Jesse Fontaine
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Jacob Mandrusiak
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The Ontario Court of Appeal recently dismissed an appeal in Project Freeway Inc. v. ABC Technologies Inc., 2025 ONCA 855, affirming a prior decision of the Ontario Superior Court of Justice that an earn-out acceleration clause was not triggered where a buyer undertook a sale and leaseback (SLB) transaction and entered into a factoring arrangement after closing, but before the end of the earn-out period.

In doing so, the ONCA endorsed a contextual interpretation of the share purchase agreement (SPA) and confirmed that, in the absence of clear drafting, "materiality" in this context turns on the transaction's impact on the earn‑out regime itself, rather than the size or value of the transaction.

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