The words of a commercial agreement matter.
In 2014, the Supreme Court of Canada, in its leading decision
Sattva v. Creston Moly Corp., 2014 SCC 53, established that the starting
point for any Court's interpretation of a contract is its
language.
While the factual matrix at the time of the contract's
execution may shed light on the parties' intentions, the Court
was clear that evidence of the agreement's surrounding
circumstances must "never be allowed to overwhelm the
words". That is, the Courts will not use the parties'
conduct to re-draft the contract.
Nearly a decade later, a recent decision of the Ontario Court of
Appeal, 3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar
Homes), 2024 ONCA 6, affirms that even where the
strict enforcement of a business agreement's language may seem
harsh, Canadian Courts will not recreate the parties'
bargain.
