What terms does Nova Scotia law imply into a business sale agreement, and what must be in writing?

Several Nova Scotia statutes add implied terms and writing rules to a business sale agreement. This page covers Nova Scotia only; for a neighbouring example, see what terms British Columbia law implies. The Sale of Goods Act deals with goods such as inventory and equipment. A share sale is a different question for your lawyer; see what a share purchase agreement is.

Implied terms and the value rule

The Act says a contract of sale may be made in writing, by word of mouth, partly in each, or by conduct, subject to the Act and any statute in that behalf, and provided that nothing in that section affects the law relating to corporations. It then sets a value, which this page does not repeat: a contract for goods of that value or upwards is not enforceable by action unless the buyer accepts part of the goods and actually receives them, gives something in earnest to bind the contract or in part payment, or some note or memorandum in writing is made and signed by the party to be charged or that party’s agent. Unless the circumstances show a different intention, the Act also implies that the seller has a right to sell, that the buyer will enjoy quiet possession, and that the goods are free from undeclared charges or encumbrances. Section 17 says that, subject to the Act and any statute in that behalf, there is no implied quality or fitness term except as listed, and merchantable quality is subject to the examined-goods proviso. Under section 56, a right, duty or liability that would arise by implication of law can be negatived or varied by express agreement, the course of dealing, or usage that binds both parties.

Land and guarantees

The Statute of Frauds says no interest in land shall be assigned, granted or surrendered except by deed or note in writing signed by the party assigning, granting or surrendering it, or that party’s agent authorized by writing, or by act and operation of law. Whether your premises lease is such an interest is a question for a lawyer. It also bars an action on a special promise to answer for another person’s debt, default or miscarriage unless the agreement, or a memorandum or note of it, is in writing and signed by the party to be charged or someone lawfully authorized by that party. Section 7 lists other agreements that need the same signed writing before an action can be brought on them, including one that is not to be performed within one year from its making, so ask your lawyer which terms of your deal that reaches.

Electronic signatures

Under the Electronic Commerce Act, section 11(1), a requirement under the law of the Province for the signature of a person is satisfied by an electronic signature. Subsection (2) lets the Governor in Council make a regulation requiring the signature to be reliable, and subsection (3) adds conditions where the signed document is to be provided to the Government, so read the section with your lawyer. Section 7(1) says nothing in the Act requires a person to use or accept information in electronic form, but a person’s consent to do so may be inferred from conduct. Section 3 lists matters the Act does not apply in respect of, including wills and their codicils and documents that create or transfer interests in land and that require registration to be effective against third parties; except for Part III, it does not apply in respect of negotiable instruments; regulations can exclude other requirements; and the Act does not limit a law that expressly authorizes, prohibits or regulates the use of electronic documents. For lease consent, see the Nova Scotia lease assignment guide.