Buyer liable for unpaid inventory; non‑competition agreement invalid for lack of consideration.
A dispute arose following the sale of business equipment and inventory under a written agreement.
The plaintiff sold chattels for a fixed price and agreed that the inventory would be counted and paid at invoice price, but the defendants refused to pay for the inventory, disputing the count and alleging breach of a subsequent non‑competition agreement.
The court found the purchasing corporation adopted the pre‑incorporation contract under s. 21 of the Ontario Business Corporations Act and that the individual defendant was not personally liable.
The court accepted the plaintiff’s inventory valuation and rejected the defendants’ competing count.
The non‑competition agreement was held invalid for lack of fresh consideration and because it was obtained under economic duress.
Jonathan’s - Aluminum & Steel Supply Inc. v. Retail Alloy Metal & Plastic Plus Limited et al., 2015 ONSC 6485