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Digest of the Week - Creation of an Agency Relationship

Digest of the Week - Creation of an Agency Relationship

A limited right to negotiate sales under a contract for service does not create an agency relationship.



2012865 Ontario Inc. v. Kinnikinnick Foods Inc.
2016 CarswellOnt 2772
Ontario Superior Court of Justice



Commercial law --- Agency — Creation of agency — General principles

Plaintiff was broker/agent who entered into brokerage agreement with defendant, manufacturer of gluten free products, to promote and sell defendant's products — Agreement provided that plaintiff would be paid commissions — Plaintiff claimed that defendant breached agreement by failing to pay commissions in accordance with agreement — Defendant claimed that plaintiff breached agreement and breached its fiduciary duties by acting for competitors of defendant who also manufactured gluten free products, without defendant's knowledge or consent — Plaintiff brought action claiming it was owed commissions; defendant counterclaimed for repayment of commissions — Action allowed; counterclaim dismissed — Defendant did not invest in plaintiff as agent and brokerage agreement was not subject to law of agency — Plaintiff was engaged by defendant under limited right to negotiate sales of defendant's products in Canada — Defendant controlled every aspect of process and was in control of what plaintiff could and could not do.

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