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ESTOPPEL BY CONVENTION: Recent Updates from the Ontario Court of Appeal

A recent decision by the Ontario Court of Appeal in Fram Elgin Mills 90 Inc. v Romandale Farms Limited, 2021 ONCA 201 (“Fram v. Romandale”), sheds light on the power and scope of an equitable remedy known as estoppel by convention.

Estoppel by convention may arise where parties have agreed that certain facts are deemed to be true and which form the basis of the transaction they are about to enter. Estoppel by convention prevents a party from denying or resiling from the parties’ shared assumptions if it would be unjust and there is evidence of detrimental reliance by one or more of the parties.

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