"An Expensive But Calculated Mistake": Supreme Court Of Canada Clarifies Requirements For Clauses Excluding Statutorily-Imposed Liability

In Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20, the Supreme Court of Canada ("SCC") clarified the requirements to contract out of statutory conditions under the Sale of Goods Act, RSO 1990, c S.1 ("SGA").

The decision may be relevant to exclusion clauses more broadly, including sale of goods legislation in other provinces. The key takeaways are:

• The modern contractual interpretation principles from Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 apply to exclusion clauses, including the need to consider the surrounding circumstances and commercial context.
• Parties must demonstrate an express and unambiguous intention to contract out of statutory-imposed conditions. However, no "magic words" or particular language is required.¹