Relief against forfeiture

In a business purchase, an agreement may say a deposit or another right is lost if a deadline is missed. The person who lost it can ask a court to step in. That is relief against forfeiture: a remedy a court may grant after a dispute, not something the contract itself gives. It sits behind the question can the seller keep my deposit if I back out?

Where the power comes from

The wording differs by province. In Ontario, section 98 of the Courts of Justice Act says a court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just. In British Columbia, section 24 of the Law and Equity Act says the court may relieve against all penalties and forfeitures, and may impose any terms as to costs, expenses, damages, compensations and all other matters that the court thinks fit. For other provinces, check that province’s legislation.

What to ask

• What does the agreement say happens to the deposit if a deadline is missed, and who decides whether it was missed?
• Which province’s law governs the agreement, and which court would hear a dispute?
• Both sections quoted above say a court “may” act, so ask a lawyer how far that discretion reaches on your facts.