Background
Survival periods for representations and warranties are
frequently used in commercial agreements. The interplay between
these survival periods and the Limitations Act
(Alberta),1 (the "Limitations Act"),
has historically been treated differently in different
jurisdictions, resulting in case law with inconsistent outcomes.
However, the recent Alberta decision in NOV Enerflow ULC v.
Enerflow Industries Inc.,2 (the "NOV
case") firmly advanced the principle that survival periods
contained in commercial agreements that effectively reduce the 2
year minimum time period provided for in the Limitations Act, do
not violate the Limitations Act.
The Facts
Enerflow Industries Inc. ("Enerflow"), as vendor, and
NOV Enerflow Industries Inc. ("NOV"), as purchaser,
entered into a Purchase and Sale Agreement ("PSA") for
the sale of the business of Enerflow to NOV. The transaction closed
on May 11, 2012 (the "Closing Date").
