Executive Summary: Key Legal and Evidentiary Issues

• Dispute centers on payment and commission terms under a consulting contract for business development services.

• Issue raised as to whether the contract was invalid due to vice of consent.

• Tribunal assesses the extent and value of services rendered by the consultant before contract termination.

• Consideration of whether Effet Tandem Inc. or Isabelle Rivest personally is liable for payment.

• Evaluation of documentary and testimonial evidence to establish the timeline and substance of contractual obligations.

• Determination that each party should bear its own legal costs, with no award of costs to either side.

Background and facts of the case

The case involves a dispute between Agostino Masecchia (plaintiff) and Effet Tandem Inc. and Isabelle Rivest (defendants). Effet Tandem Inc., led by its founder Isabelle Rivest, was developing its dating website and sought to expand its activities by involving investors. In November 2023, Rivest met Masecchia, who began providing advice and recommendations regarding the company’s investor presentations and business development. These interactions continued until mid-March 2024.

On March 15, 2024, Masecchia proposed a consulting contract, which Rivest signed as the sole shareholder of Effet Tandem Inc. The contract (“Contrat du 15 mars 2024”) described Masecchia’s mandate as planning, drafting, negotiating, and guiding the company in the sale of Effet Tandem, with other related tasks as previously discussed and accepted. The contract provided for a commission of 3% of the gross sale price (or $150,000, whichever was higher) in the event of a sale, and for payments of $5,000 on March 31, May 31, July 31, and September 30, 2024. The contract was to end on October 1, 2024, or after the completion of a transaction, whichever came first.

Masecchia claimed $11,333 for payments due up to the contract’s termination on June 16, 2024. Effet Tandem Inc. and Rivest contested the claim, arguing that before the March 15 contract, the agreement was for a 2% commission only if the company was sold, and that no sale had occurred. They also sought the annulment of the March 15 contract for vice of consent, alleging that Masecchia had changed the terms to ensure payment despite the absence of a sale.

Legal analysis and policy terms

The Tribunal examined whether Masecchia was entitled to the amounts claimed under the March 15, 2024, contract and whether both Effet Tandem Inc. and Rivest were liable. The Tribunal found that the contract was valid and that there was no evidence of vice of consent or false representations by Masecchia. The Tribunal determined that the consulting relationship and related services continued until the end of April 2024, after which the relationship ended.

The Tribunal applied the relevant provisions of the Civil Code of Québec regarding service contracts, concluding that the client may terminate the contract but must pay the consultant in proportion to the value of the work performed up to the termination date. The Tribunal found no grounds to lift the corporate veil and hold Rivest personally liable, as the contract and services were for Effet Tandem Inc.

Outcome and order

The Tribunal partially granted Masecchia’s claim, ordering Effet Tandem Inc. to pay him $7,500, representing the $5,000 payment due March 31, 2024, and 50% of the May 31, 2024, payment ($2,500), reflecting the period and value of services rendered before the end of April 2024. The claim against Rivest personally was dismissed. Each party was ordered to pay its own legal costs. The judgment also awarded legal interest and the additional indemnity provided by article 1619 of the Civil Code of Québec on the $7,500 from June 26, 2024, the date the demand letter was received. The successful party is Agostino Masecchia, with a total monetary award of $7,500 plus interest and indemnity, and no costs awarded.