Certainty of Terms - Anticipation of Formalization

Question 1

Bawitko Investments Ltd. V. Kernels Popcorn Ltd. (1999), 79 D.L.R (4th) 97 (Ont. C.A.)
(Oral Agreement To Formalize Contract Later)

Issues:
- Can an oral contract “you’ve got a deal” be an enforceable contract on its own, or is it subject to and dependent upon a formal written franchise document accepted by both parties?
- Is an oral agreement to formalize later enforceable?

Answer 1

Rules:
- Parties may bind themselves to a legal contract orally before executing it in writing at a later point in time, so long as all the terms and conditions are agreed upon before and have intention to contract.
- Is not agreement to agree but it’s contracting now to contract later – the subject of the deal is to make the deal later.