Can I hold my broker responsible for misrepresenting my business?

If a broker described your business inaccurately to buyers, the routes to recourse depend on what was said, to whom, and what you agreed with the broker. This page is about a seller’s claim against the broker. A buyer’s claim against the seller is a different question, covered in what to do if the seller misrepresented the business.

Start with your engagement agreement

Éducaloi explains that if the other party to a contract is not performing its obligations, you may have remedies, and that you must act to limit your damage. Read the agreement for what the broker promised to do, how it was to describe the business, and any limit on its responsibility. Gather the drafts of the marketing material, the emails, and any version you approved.

The Competition Act

Section 52 of the Competition Act prohibits knowingly or recklessly making a representation to the public that is false or misleading in a material respect to promote any business interest. Section 36 allows a person who suffered loss or damage as a result of conduct contrary to Part VI, which includes section 52, to sue for it. That action is barred after two years from the later of the conduct or the final disposition of related criminal proceedings.

Time limits

Ontario’s Limitations Act, 2002 says a proceeding shall not be commenced after the second anniversary of the day the claim was discovered, unless that Act provides otherwise. Alberta’s Limitations Act gives a defendant who pleads it immunity if the claimant does not seek a remedial order within two years after first knowing, or when the claimant ought to have known, of the matters it lists, or within 10 years after the claim arose, whichever expires first, subject to the Act’s exceptions. Other provinces have their own limitations legislation.

Because the clock can start when you first knew of the problem, ask a lawyer promptly. A lawyer can also say whether the complaint belongs against the broker, against the buyer, or in the sale documents.