Why Purchase Orders Alone Are Not Enough: Keep Consistent Or Lose The Benefit Of The Arbitration Clause

Electek Power Services Inc v. Greenfield Energy Centre Limited Partnership, 2022 ONSC 894 (EPS) serves as a stark reminder to monitor and review purchase orders even during the course of long-standing commercial relationships. In EPS, the Court determined that an executed purchase order, with terms and conditions containing an arbitration agreement, does not necessarily apply to future services if not expressly referenced in or annexed to subsequent purchase orders. Absent such steps, subsequent terms and conditions may override and negate any prior arbitration clause.

Takeaway

EPS confirms the long-standing proposition that an arbitration agreement is a contract in its own right, separate from the underlying contract, and reflecting the parties' intent, or lack of intent, to proceed with a particular dispute resolution forum.