Farming and agri-business continue to increase in sophistication and specialization. Part of this evolution is the use of agricultural contracts and arrangements to manage marketing, delivery and price risks. These evolve into a formal agreement with obligations to each party. Specific performance is where the court enforces the terms of the contract and the breaching party must perform the obligations of the contract. Damages are the monetary compensation that relates to the consequences of non-fulfilment of the contract obligations.
Damages aim to put the injured party in the same position as if the contract had been performed.
Agricultural contracts need to be considered within the context of general contract principles. A proper contract framework must address the parties, terms, considerations, mutual covenants, termination provisions and effective date. The main issue is that almost all agricultural enterprises in Ontario are regulated in some form. In some instances, the layers of regulation are complex and comprehensive. Thus, any agricultural contract must be understood within the context of the regulatory scheme in place.