Product Liability @ Gowlings

Supreme Court Rules on Enforceability of Consumer Arbitration Clauses

The March 18, 2011 decision of the Supreme Court of Canada in Seidel v. Telus Communications Inc. clarifies the state of the law regarding arbitration clauses in "contracts of adhesion". These are standard form contracts drafted by manufacturers or providers of goods and services and signed by customers without negotiation and usually without even being read.  The arbitration clauses in such contracts typically provide that in the event of a dispute, the parties (in particular, the consumers) agree to submit their dispute to arbitration rather than to the courts. Such clauses have become commonplace. Manufacturers and service providers increasingly rely on them as a means of ousting motions for certification of class actions related to their products.