Mitigation: Fixed Term Consulting Agreement
A fixed term consulting agreement has been held by the Ontario Court of Appeal to be interpreted in a manner different from an employment contract. This context has been determined to require a mitigation obligation, presuming no words to the contrary in a June 2023 decision. 1
This issue was not, as the Court noted, fully argued in the case before it. The Court observed that, as distinctive from an employment relationship, the relationship was not an exclusive one, “nor was he dependent” on the principal. This being said, there was valued evidence of mitigation in any event and this aspect of the decision did not determine the outcome.
The agreement originally was for a 72 month term and the plaintiff was terminated with 65 of those months remaining.
The Court did refer to a prior decision in a similar fact situation in which the Court had found that there was no mitigation obligation, again without consequence as the plaintiff had also shown proper mitigation. That case was determined to be fact specific, 2 and then left open the fundamental general proposition.
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