June 19, 2017
A Law Times article looks at a recent Court of Appeal decision in Mendoza v. Active Tire & Auto Inc., a case in which “a franchisee sought to rescind the agreement it had with a franchisor on the basis that the disclosure document it had provided did not comply with the Arthur Wishart Act.” According to the article, the act regulates franchise disclosure in Ontario and provides that franchisees can “rescind a franchise agreement without penalty within two years if the franchisor never provided the disclosure document.”
Author Alex Robinson reports that the Court of Appeal overturned a lower court decision, which “ruled in favour of the franchisor and said the franchisee could not rescind the agreement, as the disclosure was sufficient.”
Jennifer Dolman, a partner in Osler’s Litigation Practice Group and a franchise law expert, tells Law Times that the “lower court’s decision was welcome from the perspective of a lawyer who represents franchisors, but it was inconsistent with past court decisions.”
“The Court of Appeal has now corrected the record as it were, as to the fact that no, it’s not going to be a subjective consideration,” says Jennifer.
For more information, read Alex Robinson’s entire article “Ruling strict about document disclosure” in Law Times.