From Court To Contract: Navigating Recent Supreme Court And Appellate Decisions

Recent Canadian case law is reshaping how legal drafters should approach contractual clauses.Key decisions, including rulings from the Supreme Court of Canada and appellate courts in British Columbia, Alberta, Ontario and Quebec, underscore the importance of precise and context-sensitive drafting.

Five significant developments influence how exclusion clauses, arbitration provisions, and third-party beneficiary terms are now understood and enforced:

1. Exclusion clause clarity. The Supreme Court's decision in Earthco Soil Mixtures v. Pine Valley Enterprises (Earthco) regarding the Sale of Goods Act (Ontario) clarified that exclusionary clauses should be considered using modern contractual interpretation principles focusing on the objective intention of the contracting parties. With this decision, the Court broke from a line of case law supporting the proposition that contracting parties cannot be taken to have expressly agreed to exclude liability arising from the