“The Family Law Act, s. 55 (1), requires that domestic contracts be made in writing, signed by the parties and witnessed. However, in Scherer v. Paletta, 1966 CanLII 286 (ON CA), [1966] 2 O.R. 524, the Court of Appeal confirmed that the court has jurisdiction to enforce settlements.
The Ontario Court of Appeal in Geropoulos v. Geropoulos (1982), 1982 CanLII 2020 (ON CA), 35 O.R. (2d) 763 (C.A.), stands for the proposition that if litigation is commenced, compliance with section 55(1) of the Family Law Act is not required. A settlement may be enforced in accordance with the principles set out in this Scherer case.
Justice Perell in Pastoor v. Pastoor (2007), 2007 CanLII 28331 (ON SC), 48 R.F.L. (6th) 94 (Ont. S.C.), confirmed that settlements of existing matrimonial litigation do not need to comply with section 55 of the Family Law Act. At paragraph 7, he quotes from Geropoulos at pp. 768-769:
The court’s jurisdiction to enforce settlement or refuse to do so, notwithstanding any agreement between solicitor or counsel, is well-established; whether they should be enforced or not, in the final analysis, is a matter for the discretion of the court and, in litigation under the Family Law Reform Act, a matter that would be subject to the court’s overriding jurisdiction with respect to domestic contracts.
In Harris v. Harris (1996), 7 O.T.C. 265 (Gen. Div.), Justice Laforme stated that Geropolous has been interpreted as holding that the courts should encourage settlement and retain the discretion to determine whether a settlement is enforceable.
Although the agreement does not have to conform with the Family Law Act section 55, Justice Laforme indicated in Harris at paragraph 10, that there were certain factors that the court should consider when determining whether a settlement is enforceable:
1. Was either of the parties represented by legal counsel or the beneficiary of legal advice?
2. Was either party otherwise disadvantaged at any time during the course of the negotiations?
3. Can the written material the parties prepared, or the oral presentations, that are being relied upon support a prima facie conclusion that either constitutes a settlement agreement?
4. Does the evidence demonstrate that the parties intended that the written or oral representations or negotiations are to be binding on them?
5. Was there an intention that some final act or determination be made before the settlement was to be final and binding?
6. Does the enforcement or non-enforcement of the negotiated resolution result in an injustice to either of the parties?
7. Does enforcement encourage negotiated settlement and discourage litigation and does it support the overall purpose and intent of the principles of the Family Law Act?
At common law, the acceptance must match the offer. An acceptance that indicates different terms cannot accept the offer. Did the father reasonably understand that the mother’s communication constituted an acceptance? See: UBS Securities Canada Inc. v. Sands Brothers Canada, Ltd., 2007 ONCA 405, 224 O.A.C. 315.
In determining whether a contract was formed and hence should be enforced, the court must apply the objective test of contract formation. The Court of Appeal quotes from Waddams on the Law of Contracts (5ed) at page 103:
But the test of whether a promise is made, or of whether assent is manifested to a bargain, does not and should not depend on an inquiry into the actual state of mind of the promisor, but on how the promisor’s conduct would strike a reasonable person in the position of the promisee.
It is a basic principle of contract law that an offer which is responded to with an acceptance including an added condition is a counter-offer.”