A Payment Plan Does Not Equal A New Contract

When parties enter into a transactional contract, they are free to enter into a payment plan agreement for outstanding debt owed under the contract. However, the payment plan itself does not necessarily mean that the parties have entered into a new binding contract.

Such was the case in Songbird Life Sciences Inc. v. Connectus Services Ltd. et al, 2023 ONSC 2089. In December 2020, during the pandemic, Songbird Life Sciences Inc. ("Songbird") contracted with Connectus Services Ltd. ("Connectus") to supply COVID-19 testing and monitoring products. Connectus was to use these products under two identical contracts with the National Hockey League and the Winnipeg Jets hockey club. Two contracts were signed between Songbird and Connectus, one for each organization.