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ARTICLE · 24 MAY 2017

Rolling Liability for Continuous Breaches of Commercial Leases

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Commercial leases often contain covenants of continuous performance; a breach of such a covenant is also continuous.

CanadaReal Estate and Construction
Jason Annibale
Jason Annibale
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Commercial leases often contain covenants of continuous performance; a breach of such a covenant is also continuous. However, a business’ decision to enter into, default under, or litigate a commercial lease is made at a distinct moment in time. Businesses can weigh the costs and benefits of such a decision most accurately when obligations and rights can be estimated contemporaneously. Identifying the scope of liability is vital to ensure that such a decision is sufficiently informed. The Ontario Court of Appeal’s decision in Pickering Square Inc. v Trillium College Inc.[1], sheds light on the limitation of liability in leases when breaches are continuous, specifically, when a claim for a continuing breach of contract will be considered ‘discovered’ for the purposes of the Limitations Act, 2002[2].

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