When a preliminary agreement is incomplete and does not contain the provisions intended to govern a contractual relationship, can the original contract be enforceable?
Ontario, Canada
The following excerpt is from Don Mills Residents Inc. v. City of Toronto, 2021 ONSC 4009 (CanLII):
The Court of Appeal for Ontario’s reasoning in Bawitko Investments Ltd v. Kernels Popcorn supports this finding. The court held: When the original contract is incomplete because essential provisions intended to govern the contractual relationship have not been settled or agreed upon; or the contract is too general or uncertain to be valid in itself and is dependent on the making of a formal contract; or the understanding or intention of the parties, even if there is no uncertainty as to the terms of their agreement, is that their legal obligations are to be deferred until a formal contract has been approved and executed, the original or preliminary agreement cannot constitute an enforceable contract. In other words, in such circumstances the "contract to make a contract" is not a contract at all.[8]
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