Executive Summary: Key Legal and Evidentiary Issues

• The core dispute involved whether a verbal contract was concluded for the sale of 200 tonnes of Canola to be delivered in fall 2021.

• Nutrinor claimed that a binding agreement was reached during a phone call on May 26, 2021, and followed up with a written confirmation.

• The defendant denied having entered a binding contract, arguing no formal signature was provided.

• The court evaluated witness credibility and concluded that Nutrinor’s version was more credible and consistent with the evidence.

• Damages were assessed based on the market price difference between the agreed contract price and the failed resale price.

• The court awarded Nutrinor $66,000 in damages plus interest and legal costs for breach of contract.

Background and nature of the dispute

Nutrinor Coopérative brought a claim against Les Moissons S.M. inc. for breach of a Canola supply contract. The claim centered on a verbal agreement allegedly reached on May 26, 2021, in which SM committed to delivering 200 tonnes of Canola in fall 2021 at a price of $666 per tonne. Nutrinor asserted that a legally binding contract was formed during a phone call between Maxime Lavoie (Nutrinor) and Sébastien Montmigny (SM), and this was immediately followed by a confirmation email and contract form.

SM, however, refused to deliver the grain, arguing that no contract existed because the written form was never signed. By fall 2021, market prices had sharply increased to over $1,000 per tonne, prompting Nutrinor to seek damages for the shortfall it faced when it had to cancel a resale agreement with its buyer, Viterra.

Contract formation and credibility assessment

The court examined the communications between the parties, including text messages and the testimony of both Lavoie and Montmigny. The court found Lavoie’s testimony to be detailed, consistent, and credible. He confirmed that Montmigny agreed verbally to the sale terms during their May 26 call and that Nutrinor acted immediately by sending a written confirmation and entering the deal into its internal systems.

Montmigny claimed he only asked for price information and had not yet agreed to sell. He said he never saw the follow-up email and did not object to the alleged contract until months later. The court found this account lacked credibility, particularly since he failed to respond formally or contest the contract in writing despite being familiar with Nutrinor’s standard confirmation clause, which deemed the contract valid unless objected to within five days.

The judge concluded that the exchange constituted a valid contract under article 1385 of the Civil Code of Québec. No specific form was required, and the verbal agreement met all legal conditions for formation. The evidence supported Nutrinor’s claim that Montmigny intended to conclude the sale on May 26.

Damages assessment

By fall 2021, Nutrinor was unable to obtain a replacement supply at the originally agreed price due to market changes. As a result, it had to cancel its resale deal with Viterra. The court applied article 1611 C.c.Q., which provides for full compensation for loss and lost profits caused by breach of contract.

Nutrinor calculated its damages based on the $345 per tonne price increase (from $666 to $1,011) over 200 tonnes, totaling $69,000. The court accepted the methodology but deducted $3,000 to account for Nutrinor’s profit margin, preventing double recovery.

Outcome

The Court awarded Nutrinor Coopérative $66,000 in damages, plus legal interest and the additional indemnity from November 9, 2021—the date of formal notice. The judgment also included costs. This case confirms that under Québec civil law, verbal agreements can be binding in commercial transactions and highlights the importance of promptly contesting contractual obligations when there is disagreement.