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ARTICLE · 06 JUNE 2008

Design Services Ltd. v. Canada: Liability Of Owner To Subcontractors In Tendering Context

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On May 9, 2008, the Supreme Court of Canada delivered its decision in “Design Services Ltd. v. Canada, 2008” SCC 22. This case addressed the issue of an Owner’s liability to subcontractors when that Owner allegedly breaches its tendering obligations to Contractors.

CanadaLitigation, Mediation & Arbitration
Matthew Ghikas
Matthew Ghikas
Marina Pratchett
Marina Pratchett
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On May 9, 2008, the Supreme Court of Canada delivered its decision in Design Services Ltd. v. Canada, 2008 SCC 22. This case addressed the issue of an Owner's liability to subcontractors when that Owner allegedly breaches its tendering obligations to Contractors.

The Court refused to extend the established principles of recovery by a general contractor for breach of tendering obligations to the subcontractor community. Although an owner may be liable to the disappointed general contractor, the Supreme Court held that persons who would have been subcontractors to a general contractor had the contract been properly awarded, may not claim damages for economic losses suffered because the contract was wrongfully awarded. The case was decided based on contract law principles; the Court determined that the right of action given to a contractor is founded on principles of contract, and potential subcontractors

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