The 8th arrondissement found that compensatory damages were awarded to fully compensate one party for the damage caused by the other party. If the parties agree to settle a case, the end of a dispute is an essential part of the consideration exchanged under the agreement. By breaking a transaction agreement, the break party deprives the other party of the essential advantage of its good deal. As a result, the 8th Arrondissement found that the unsolicited party had to recover reasonable legal fees as compensation and not as “litigation costs.” As legal fees were eligible for reimbursement, the U.S. rule did not exclude recovery in this case, although none of the exceptions to the U.S. rule were applicable. The majority also found that it does not matter whether the uninjured party sought the application of the settlement agreement in a separate remedy or by filing an application. Even if the court is of the opinion that Rayco`s conduct is the exception in bad faith to the U.S. rule, law firms should still not claim legal fees because law firms have filed an application, no separate claim or counter-action. An application is an inappropriate vehicle for compensation for rights not invoked in the submissions. To recover legal fees, law firms would have had to file their own new claim or counterclaim for breach of the settlement agreement, not just a claim in an existing action. This is because the defendants are trying to add additional time to the transaction after the parties have reached a final agreement.
In particular, the defendants try to add the term that [the other party would like to add]. First, there is no doubt that the parties have reached agreement on this matter. The terms of this transaction are defined in the transaction agreement signed by the parties and the lawyer. The defendants cannot challenge it. The Court cannot now add a substantial term that the parties have not accepted and have not included in their written transaction agreement. Even if the defendants felt that the applicant agreed with a concept clause that was never discussed, “unilateral errors” would not allow the defendants to circumvent their obligations under the contract/transaction contract.
