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ARTICLE · 05 JULY 2024

Digging Deep Into Exclusion Clauses: The Supreme Court Of Canada Provides Guidance On Contractual Interpretation

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Exclusion clauses—provisions which generally excuse a party from legal responsibility under a contract—are just like any other contractual term...

CanadaLitigation, Mediation & Arbitration
Tom A. Posyniak
Tom A. Posyniak
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Litigation and Dispute Resolution Bulletin

Exclusion clauses—provisions which generally excuse a party from legal responsibility under a contract—are just like any other contractual term: they must be interpreted according to the ordinary meaning of the words used by the parties read in light of the factual matrix known to each party at the time they entered into a contract. This was one of the main messages from one of the Supreme Court of Canada's more significant private law cases in 2024: Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20.

Background

Earthco is about a compelling subject matter: topsoil. The buyer had a municipal contract to remediate flooding that required it to replace topsoil for drainage purposes. The buyer contacted a seller to obtain topsoil for particular specifications. The seller provided test reports but warned against buying topsoil without contemporaneous laboratory reports. Given time constraints faced by

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