Shared Writing: Bennedetto v$.2453912$ Ontario Inc.

Bennedetto signed an agreement to purchase real estate, stipulating that he was signing $$in trust for a company to be incorporated without any personal liabilities.$$ He paid a security deposit of $$100,000.$ He later said he would not close the transaction, and requested return of the deposit. The vendor refused.

The vendor then moved for summary judgment. The Judge held that the provisions of the Canada Business Corporations Act regarding pre$-$incorporation contracts do not overrule the common law rules regarding security deposits in real estate transactions. The vendor was allowed to retain the deposit, so Bennedetto appealed.

Should the common law rule regarding deposits take priority over the pre$-$incorporation contract provisions that say that a promoter is not bound by the contract unless the contract expressly provides that is the case?