Friday, 27 July 2012

Verbal Contracts – The Chris Roussakis Matter

Not every contract needs to be in writing. As one learns in first year law school, there are three necessary elements in order for a contract to be formed: an offer, the acceptance of that offer, and consideration for the agreement (i.e. both sides have to get something out of the deal.) Note that nowhere in there is it set out that the offer or the acceptance thereof must be in writing. To many this scenario is what is known as “verbal contracts;” in law one can simply omit the word “verbal.”

The Chris Roussakis matter (stories here and here) demonstrates the case at hand. I represented Mr. Roussakis in his bid for compensation.

Facts


The facts of Mr. Roussakis’s matter have been repeated in the papers: Mr. Roussakis was approached by Mr. Dimitri Soudas, executive director of communications for the Canadian Olympic Committee (“COC”) and a former spokesman for Prime Minister Harper, and asked if he wished to be one of the official COC photographers for the London Games. Compensation, including the value of the contract, the length of the contract, and all the operative details were agreed upon between Roussakis and Soudas as early as February of this year.

Although no written contract was ever formalized, the COC proceeded to send Mr. Roussakis to London in advance of the games, and to COC training in Montreal – both at the COC’s expense. Photographs of Mr. Roussakis in London appeared in newspapers at the time


Mr. Soudas confirmed Mr. Roussakis had appeared in documentation as an official photographer for the committee and had been involved in preparations for the Games.

The Law


As I blogged about in an earlier post (No Changes without Consideration) Ontario courts will recognize employment agreements between parties, notwithstanding the fact that they may not be in writing.

In Fasullo v. Investments Hardware Ltd., 2012 ONSC 2809, the Honourable Justice Sanderson released a decision that is on point. In that case, Justice Sanderson held that the employee’s contract had been finalized in May 2007 - prior to a written agreement being put to him in June 2007 - because the fundamental terms of his employment had been agreed upon: Mr. Fasullo knew his start date, his responsibilities, and his expected salary.  When the written contract was put to him a month later, it contained a new provision. No consideration for the new restriction was provided. Justice Sanderson, for the reason set out below, held that that new restrictive provision was of no force and effect.

In her reasons for decision, Justice Sanderson relying on an earlier Ontario Court of Appeal decision held that:

If Fasullo received no consideration for signing the June 20, 2007 Document, at law the Termination on Notice clause in it is null and void. The Plaintiff cannot be bound by a provision that was null and void ab initio and continued to be null and void to the date of his dismissal. The Contract was never amended to include a valid Termination on Notice Clause. The Defendant cannot rely on that clause in the June 20, 2007 Document to limit the Plaintiff's claim to presumptive reasonable notice and severance pay based on reasonable notice.  [Emphasis added.  Para. 56]
By saying that “the contract was never amended,” Justice Sanderson made an implicit finding of a contract having been formed without anything being reduced to writing.

Argument


Returning to first principles, three questions emerge:

1. Was an offer made by the COC to Mr. Roussakis?
2. Did Mr. Roussakis accept that offer?
3. Was there consideration for the agreement?

The answers to these questions seem straightforward enough. Thus, the argument for compensation.

Given that discussions between Mr. Roussakis and the Canadian Olympic Committee continue, it would be inappropriate for me to comment further on his specific case.

Question


The question is put out there for comment however, on the facts and law as presented, did Mr. Roussakis have a binding agreement with the COC?

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As always, everyone’s situation is different.  The above is not intended to be legal advice for any particular situation and it is always prudent to seek professional legal advice before taking any decisions on one’s own case.

Sean P. Bawden is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer practicing with Kelly Santini LLP, and part-time professor at Algonquin College teaching Trial Advocacy for Paralegals. He is a trustee of the County of Carleton Law Association for 2013.



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