Formation of Contract & Fundamental Breach
In Northridge Property Management Inc. v. Champion Products
Corp., 2017 ONCA 249, the Court considered two issues relating
to agreements to lease: (1) when an agreement to lease is binding,
as opposed to an unenforceable "agreement to agree" and
(2) when the threshold of a fundamental breach by the landlord is
achieved.
Before discussing the decision in Northridge, let us go
back to basics. The case law is well-settled – there are
certain essential terms that must be agreed upon by the parties in
order for a court to find there is a binding and enforceable lease
agreement in place. The essential elements of a lease (as set out
by Williams & Rhodes and approved in many cases) are:
"the parties, a description of the premises to be demised, the
commencement date and duration of the term, the rent, if any, and
all material terms of the contract not incident to the relation of
landlord and tenant."
