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ARTICLE · 03 SEPTEMBER 2014

Limitations Of Liability Clauses That May Not Limit Liability

Miller Thomson
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The Alberta Court of Appeal has significantly reduced the protection that consultants rely upon when they include limitations of liability provisions in their contracts.

CanadaReal Estate and Construction

A recent decision of the Alberta Court of Appeal, Swift v Tomecek Roney Little & Associates Ltd., 2014 ABCA 49, has significantly reduced the protection that consultants rely upon when they include limitations of liability provisions in their contracts.  As well, the case highlights issues that can arise when a consultant enters into an agreement with an owner on a project that has multiple owners.

In this case, the plaintiffs Mr. and Mrs. Swift jointly purchased land on Vancouver Island to build a large custom home.  Mr. Swift, as sole signatory, entered into a design agreement with an architectural firm ("the Architect") that contained a limitation of liability clause that purported to limit the Architect's liability to $500,000 for "any and all claims ... which arise solely and directly out of the Designer's duties and responsibilities pursuant to this Agreement ... whether such claims sound in contract or in tort" (the "Limitation Clause").  The Limitation

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