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CIVIL DISPUTES GUIDE
Breach of Contract Disputes in Ontario
A practical guide to contract claims, unpaid invoices, failed performance, termination, damages, evidence, limitation periods and deciding whether to negotiate, sue or defend.
A contract dispute is rarely only about whether someone broke a promise. The real questions are what the agreement required, what proof exists, what loss was caused and whether the responding party acted reasonably after the problem occurred.
Prepared by Tatyana Trusz, Trusz Law • Updated July 2026 • 15 min read
QUICK ANSWER
What is a breach of contract?
A breach of contract occurs when one party fails to do what a valid agreement requires, or does something the agreement prohibits, without a legal excuse.
A successful claim usually requires more than pointing to the breach. The claimant must prove the agreement, the obligation that was breached, the loss caused by the breach and the amount recoverable. The claimant may also have to show reasonable steps to reduce or mitigate the loss.
IN THIS GUIDE
RELATED CIVIL DISPUTES
CONTRACT DISPUTE?
Prove the agreement, the breach, the loss and the response.
The emails, invoices, revisions and post-breach conduct often decide the case.
THE SHORT ANSWER
A contract claim is built from agreement, breach, causation and loss
A breach-of-contract dispute usually turns on four connected issues:
- Agreement: What contract existed and what terms applied?
- Breach: What obligation was not performed?
- Causation: Did the breach cause the loss being claimed?
- Remedy: What money, order or other result is legally available?
Even where the breach seems obvious, the claim may fail or be reduced if the loss is not proven, the evidence is weak or the claimant failed to take reasonable steps to reduce the damage.
KEY TAKEAWAYS
At a glance
- A contract can be written, verbal or partly based on conduct, but proof becomes harder without clear documents.
- Not every disagreement is a breach; the obligation must come from the agreement or the law.
- Common breaches include non-payment, delay, defective work, non-delivery and refusal to perform.
- Damages are usually intended to compensate for proven loss, not punish the breaching party.
- The injured party usually has a duty to mitigate, or take reasonable steps to reduce loss.
- Ontario’s basic limitation period is generally two years from discovery of the claim.
- Ontario Small Claims Court currently handles claims up to $35,000.
CONTRACT BASICS
What must be proven before breach can be shown?
Before proving breach, the claimant must first prove what agreement existed.
Important questions include:
- Who were the parties?
- Was there offer and acceptance?
- Was something of value exchanged?
- Were the essential terms certain enough?
- Was the agreement written, verbal or partly shown through conduct?
- Did the person signing have authority?
- Were there later amendments, side agreements or emails changing the deal?
- Did any conditions need to be satisfied before performance was due?
The written contract is important, but it may not be the only evidence. Quotes, purchase orders, invoices, emails, text messages, meeting notes and performance history may all matter.
TYPES OF BREACH
What kinds of contract breaches commonly lead to disputes?
| Breach type | Common issue |
|---|---|
| Failure to pay | Invoices, deposits, milestones, holdbacks, interest and set-off claims. |
| Failure to deliver | Goods, services, documents or access not provided as agreed. |
| Delay | Missed deadlines, project delay, extension disputes and consequential loss. |
| Defective performance | Work completed below the agreed standard or outside specifications. |
| Repudiation | One party indicates they will not perform or acts inconsistently with the contract. |
| Improper termination | Dispute over whether the agreement could be ended and what notice or cure period applied. |
The legal consequences depend on the contract wording, seriousness of the breach and what the non-breaching party did in response.
THE EVIDENCE
What evidence matters in a breach-of-contract dispute?
Useful evidence may include:
- signed contracts and amendments;
- quotes, proposals and purchase orders;
- emails, texts and meeting notes;
- invoices and payment records;
- proof of delivery or non-delivery;
- photographs, inspection notes or defect reports;
- project timelines and milestone records;
- change orders;
- termination notices;
- expert reports or repair estimates;
- attempts to resolve the issue; and
- documents proving the amount of loss.
Evidence created before the dispute often carries more weight than explanations created after litigation begins.
“The strongest contract case is not the one with the angriest emails. It is the one that can prove the agreement, the breach, the loss and the reasonable steps taken afterward.”
— Trusz Law
REMEDIES
What can a court award for breach of contract?
The most common remedy is damages: money intended to compensate for the loss caused by the breach.
Depending on the case, remedies may include:
- unpaid amounts owing;
- cost to repair or complete defective work;
- lost profit where proven and not too remote;
- refund of deposits or overpayments;
- interest;
- costs of mitigation;
- declaration of rights;
- specific performance in rare or appropriate cases; and
- injunctions or urgent relief in some circumstances.
The contract may also contain clauses affecting remedies, such as limitation of liability, liquidated damages, exclusion clauses, notice requirements or dispute-resolution terms.
MITIGATION
Why does mitigation matter?
An injured party usually cannot let loss grow unnecessarily and then expect the other side to pay for all of it.
Mitigation means taking reasonable steps to reduce the loss after a breach. Examples may include:
- finding a replacement supplier;
- reselling goods;
- repairing defects reasonably;
- seeking alternate work or services;
- preserving perishable or time-sensitive assets;
- responding promptly to a non-payment or delay issue; and
- documenting the steps taken.
Mitigation does not require perfection. It requires reasonableness in the circumstances.
COURT OPTIONS
Small Claims Court or Superior Court?
The forum depends on the amount claimed, remedies sought and complexity of the dispute.
Small Claims Court
Ontario Small Claims Court currently handles claims for money or return of personal property up to $35,000, not including interest and costs. It can be a practical forum for unpaid invoices, smaller service disputes and straightforward contract claims.
Superior Court of Justice
Larger claims, more complex disputes, injunctions, specific performance or claims above the Small Claims Court limit may proceed in Superior Court.
Limitation period
Ontario’s basic limitation period is generally two years from the day the claim is discovered. Waiting too long can end the right to sue even where the underlying complaint is strong.
DEMAND LETTERS & SETTLEMENT
Should you send a demand letter before suing?
A demand letter can be useful where it:
- sets out the contract and breach clearly;
- states the amount claimed and how it was calculated;
- identifies key evidence;
- requests payment, performance or another solution;
- sets a reasonable deadline; and
- preserves the option of litigation if the matter is not resolved.
A demand letter should be strategic, not just emotional. It may become evidence later.
Settlement can also involve more than money. The parties may agree to revised delivery, payment plans, return of goods, releases, confidentiality, repair work, termination terms or future business arrangements.
COMMON MISTAKES
Problems that make contract disputes harder to prove or defend
No written record of the essential terms.
Verbal agreements can exist, but proof becomes harder.
Continuing performance without reserving rights.
A party may unintentionally weaken its position by acting as though the breach does not matter.
Terminating too quickly.
Improper termination can itself become a breach.
Ignoring notice and cure periods.
The contract may require notice before remedies are available.
Claiming losses without documents.
Damages must be proven.
Failing to mitigate.
Recoverable damages may be reduced if reasonable steps were not taken.
Waiting too long.
Limitation periods can bar the claim.
Using inflammatory communications.
Emails and texts may become exhibits.
Overlooking dispute-resolution clauses.
The contract may require mediation, arbitration, notice or a specific venue.
HOW TRUSZ LAW CAN HELP
Assess the contract, the evidence and the practical path to resolution.
Trusz Law assists with Ontario breach-of-contract disputes, including unpaid invoices, failed performance, termination disputes, service disagreements, defective work, business-to-business disputes and contract-defence strategy.
Depending on the matter, that may include reviewing the agreement, evidence, damages, mitigation, demand letters, negotiation options, Small Claims Court, Superior Court and settlement terms.
The goal is practical: determine whether the dispute should be resolved, litigated, defended or narrowed before costs exceed the value of the claim.
FREQUENTLY ASKED QUESTIONS
Breach-of-contract questions people often ask
What is breach of contract?
A breach occurs when a party fails to perform a contractual obligation or acts contrary to the agreement without a legal excuse.
Can a verbal contract be enforced in Ontario?
Some verbal contracts can be enforceable, but proving the terms, parties and breach can be harder without written evidence.
What evidence do I need for a breach-of-contract claim?
Useful evidence includes the agreement, emails, invoices, payment records, delivery records, change orders, termination notices and documents proving the loss.
Can I sue for unpaid invoices?
Yes, unpaid invoices may support a contract or debt claim if the agreement, work, amount owing and non-payment can be proven.
What damages can I claim?
Damages may include unpaid amounts, repair or completion costs, lost profit where proven, interest and reasonable mitigation costs, depending on the facts and contract.
Do I have to reduce my losses after a breach?
Generally yes. A claimant usually has a duty to take reasonable steps to mitigate or reduce the loss.
Can I terminate a contract if the other side breached it?
Sometimes, but termination rights depend on the contract and seriousness of the breach. Terminating improperly can create a new breach.
What is repudiation?
Repudiation occurs where a party indicates they will not perform or acts in a way that is inconsistent with continuing the contract.
What is the limitation period for breach of contract in Ontario?
Ontario’s basic limitation period is generally two years from discovery of the claim, subject to the facts and statutory rules.
Can breach-of-contract claims go to Small Claims Court?
Yes, Ontario Small Claims Court handles claims up to $35,000, not including interest and costs.
Should I send a demand letter first?
Often, yes. A clear demand letter can frame the issue, support settlement and preserve litigation options.
When should I speak with a lawyer?
Legal advice is especially useful where the amount is significant, the contract is unclear, termination is being considered, limitation periods are approaching or the other side has threatened litigation.
OFFICIAL RESOURCES
Further reading
ABOUT THIS RESOURCE
Prepared by Tatyana Trusz, Trusz Law. This resource is for general information only and is not legal advice. Contract disputes depend on the agreement, evidence, loss, mitigation, limitation periods and procedural forum. Last reviewed July 2026.
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