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ARTICLE · 18 MAY 2016

Are Contractual Survival Periods Invalid Under The Alberta Limitations Act? Maybe…

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The Alberta Court of Queen's Bench considered the interplay between the Alberta Limitations Act and a contractual survival period in a purchase and sale agreement.

CanadaEnergy and Natural Resources
Karen A. Salmon
Karen A. Salmon
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In NOV Enerflow ULC v Enerflow Industries Inc., 2015 ABQB 759 ("NOV v Enerflow") the Alberta Court of Queen's Bench considered the interplay between the Alberta Limitations Act and a contractual survival period in a purchase and sale agreement. It is common in purchase and sale agreements to include a clause specifying that no claim based on a breach of a representation or warranty can be brought after a specified length of time, often between 9 months to 2 years. However, the Limitations Act provides that an agreement reducing any limitation period under the Act is not valid. In NOV v Enerflow, the Court clarified the impact of the Limitations Act on such clauses in part, holding that the survival period in question was not invalid notwithstanding that it purported to limit the ability of a party to bring a claim to a period of less than the two year discoverability period under the Limitations Act. However, the decision seems to imply that the interaction between a

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