Introduction
A judge can only imply a contractual term if it is a reasonable
and contextual reflection of what the parties must have
intended.
Two recent appellate decisions show how this test is applied in
practice. Most recently, the Court of Appeal for Ontario in Energy
Fundamentals Group Inc v Veresen Inc, 2015 ONCA 514 upheld
an application judge's decision to imply a term governing one
party's disclosure obligations. In Moulton Contracting
Ltd v British Columbia, 2015 BCCA 89, released earlier
this year, the BC Court of Appeal overturned a trial judge's
finding that the province had breached an implied term in a timber
sale agreement.
Despite these different results on the facts, both courts took a
similarly balanced legal approach, one that generally preserves
freedom of contract, but still leaves room for judicial
intervention if necessary. In doing so, they confirmed that the
latest Supreme Court of Canada cases on contract interpretation, Sattva
