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Category Archives: Contracts

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Hall of Fame

By Brandon Kain and Elder C. Marques on Posted in Contracts, Features

Last month, senior McCarthy Tétrault litigator and Canadian Appeals Monitor contributor Geoff Hall generated lots of attention with his insightful post on contractual interpretation in cases where an “unthinkable” change in circumstances seems to have a profound effect on the bargain struck by the parties. Geoff’s analysis looked at a recent UK Supreme Court decision, Lloyds TSB… → Read More

The Second Opinion: Restrictive Covenants at the Ontario Court of Appeal

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

By Brandon Kain on Posted in Competition, Contracts, Corporate Law, The Second Opinion

The Ontario Court of Appeal has released an important new judgment concerning the enforceability of restrictive covenants: Martin v. ConCreate USL Limited Partnership, 2013 ONCA 72.  The decision provides guidance about when a restrictive covenant will be unenforceable owing to its duration and the scope of its prohibited activities, and suggests that a different test for unenforceability… → Read More

La notion de mitigation à la Cour suprême du Canada: le triomphe de la théorie sur la réalité commerciale

By Geoff R. Hall on Posted in Case Comments, Contracts

Une décision troublante Lorsque le droit des contrats ne parvient pas à s’accorder avec la réalité commerciale, c’est troublant. Lorsqu’un litige commercial fait fi du contexte économique sous-jacent, c’est troublant. Dans Southcott Estates Inc. c. Toronto Catholic District School Board, la Cour suprême du Canada a mis en application des modèles de droit des contrats… → Read More

Do Equitable Ends Justify Expanding “Unlawful Means”? The Supreme Court of Canada Grants Leave in A.I. Enterprises Ltd. v. Bram Enterprises Ltd.

By Ronald Podolny on Posted in Case Comments, Class Actions, Competition, Contracts, Insurance, Procedure, Torts

Introduction The Supreme Court has granted to leave to appeal in a case that has the potential to elucidate an area of tort law where confusion has reigned for far too long. In the words of the House of Lords, “the law in this area is a mess.” The subject that has engendered this confusion is the… → Read More

A Doctrine of Mitigation in the Supreme Court of Canada: A Triumph of Theory Over Commercial Reality

By Geoff R. Hall on Posted in Case Comments, Contracts

A troubling decision It is troubling when contract law fails to accord with commercial reality. It is troubling when a commercial case ignores the underlying economic context. In Southcott Estates Inc. v. Toronto Catholic District School Board, the Supreme Court of Canada applied theoretically pure models of contract and corporate law to conclude that the… → Read More

The Penalty Doctrine: Focus on Substance Not Form Says The High Court of Australia

By Carole Piovesan on Posted in Case Comments, Class Actions, Contracts, Corporate Law, Financial Services

When is a contractual term a penalty? Traditionally, a penalty has been characterized as a provision that results in unconscionable and disproportionate compensation for breach of contract. The recent decision of Australia’s High Court in Andrews v. Australia and New Zealand Banking Group Ltd (“Andrews”) has widened the scope of the common law penalty doctrine… → Read More

SCC to Weigh-In on the Enforceability of Restrictive Covenants Where an Employment Relationship Follows the Sale of a Business

By Angela Juba on Posted in Case Previews, Contracts, Labour and Employment

This winter, the SCC will have the opportunity to clarify how the courts should go about determining how strictly to interpret restrictive covenants where they relate to both an employment agreement and the sale of a business. The opportunity arises from the Supreme Court’s decision to grant leave in Guay Inc. c. Yannick Payette et… → Read More

UK Supreme Court to Pierce the Issue of the Corporate Veil

By Brandon Kain on Posted in Case Previews, Conflict of Laws, Contracts, Corporate Law

The UK Supreme Court has granted permission to appeal in a case that raises important issues regarding the legal doctrine of “piercing the corporate veil”.  The decision in VTB Capital Inc. v. Nutritek International Corp. will give the Court an opportunity to clarify when the veil should be pierced, and whether the legal effect of doing so is to constitute the… → Read More

Interpretation of Interrelated Contracts in a Commercially Effective Manner: Clarification of Two Important Principles of Contractual Interpretation

By Geoff R. Hall on Posted in Case Comments, Contracts

It is well established that when interpreting a contract the document must be read as a whole, without considering the disputed words or phrase in isolation from the rest of the contractual text. In recent years, the Ontario Court of Appeal has expanded this principle to the interpretation of interrelated contracts, such that if (as… → Read More

“Idea Theft” Lawsuits Gain New Life in United States

By Daniel G.C. Glover on Posted in Case Comments, Contracts, Intellectual Property, Media

Introduction In a case with several important echoes to Canadian appellate law, the United States Court of Appeals for the Second Circuit has revived the actor’s Hayden Christensen’s “idea theft” lawsuit against the USA Network this week in the Forest Park Pictures v. Universal Television Network Inc. decision. Background In 2005, the plaintiffs developed a concept… → Read More

Can the Queen Be Taken at Her Word? Federal Court of Appeal Answers in Canada v. South Yukon Forest Corporation

By Ronald Podolny on Posted in Administrative, Case Comments, Construction and Real Estate, Contracts, Energy, Torts

The Federal Court of Appeal has clarified when the federal Crown will be held responsible for representations made by its officers. In issuing its decision, the Court opted for a narrow interpretation of the Crown’s liability and reiterated that parties that rely on the Crown’s representations have the responsibility to conduct their own due diligence.

A Rascal of a Doctrine: The Elusive Definition of Resulting Trust

By Ronald Podolny on Posted in Bankruptcy and Debt, Case Previews, Class Actions, Contracts

The Supreme Court of Canada has recently granted leave to appeal from the judgment of the British Columbia Court of Appeal in Edward Sumio Nishi v. Rascal Trucking Ltd. This appeal focuses on the test for a resulting trust in the commercial context. The decision will be of interest to a broad range of business… → Read More

The ISDA Master Agreement and Implied Terms: Text Over Context in the English Court of Appeal

By Geoff R. Hall on Posted in Bankruptcy and Debt, Case Comments, Contracts, Financial Services

Should a commercial contract be interpreted literally, or should a court adopt a non-literal interpretation if necessary to achieve a result that makes commercial sense given the context (the factual matrix) of the agreement? This issue is an enduring one in contractual interpretation, and was recently put to the test in Lomas & Ors v…. → Read More

How Momentous is This? New SCC Ruling on Forum Selection and Arbitration Clauses

By Elder C. Marques on Posted in Alternative Dispute Resolution, Case Comments, Conflict of Laws, Contracts, Procedure

In twelve short paragraphs, the Supreme Court of Canada’s new judgment in Momentous provides helpful guidance on the question of whether a motion to dismiss on jurisdictional grounds may be brought after the delivery of a Statement of Defence. The Court also reaffirms the centrality and uniqueness of the “strong cause” test where a jurisdictional… → Read More

CONGRATULATIONS!!! YOU HAVE WON MILLIONS!!! … or not yet?

By Marc-Andre Russell and Rachel Laferriere on Posted in Case Comments, Contracts

Actually, not. The odds of your winning are one in 120 million. On February 28, 2012, the Supreme Court of Canada established the test for misleading advertising and rendered a landmark decision that will generate important discussions all across Canada. Background In 1999, Mr. Richard received an “Official Sweepstakes Notification” in the mail. In large,… → Read More

BCCA Addresses Tercon Test for Public Policy and Exemption Clauses

By Brandon Kain on Posted in Case Comments, Contracts

In its well-known decision in Tercon Contractors, the Supreme Court of Canada set out a three-part test for the enforceability of contractual exemption clauses: (1) does the clause, as a matter of interpretation, apply to the dispute; (2) if so, was the clause unconscionable at the time the contract was made; and (3) if not, would enforcing the clause be contrary to… → Read More

Canadian Contractual Interpretation Law: A New Edition

By Brandon Kain on Posted in Contracts, Features

Canadian Appeals Monitor is proud to announce that the second edition of Canadian Contractual Interpretation Law by Geoff Hall, one of our contributing bloggers, has just been published. The book is the only text focused on contractual interpretation under Canadian common law, and the new edition includes commentary on contractual interpretation under Quebec civil law…. → Read More

Rectification of Contracts in Québec: Another Loss for Taxation Authorities and Final Word to be Received from the Supreme Court

By Rachel Laferriere on Posted in Case Comments, Contracts, Tax

As was already mentioned in the previous blog posted on October 25, 2011 by our colleague, Brandon Kain, the Supreme Court of Canada has granted leave to appeal in a case involving the rectification of contracts in Agence du revenu du Québec vs. Services environnementaux AES Inc. Recently, the Supreme Court of Canada also granted… → Read More

U.S. Supreme Court Rules on Enforceability of Arbitration Clauses

By Ronald Podolny on Posted in Case Comments, Class Actions, Contracts, Procedure, Torts

Introduction The United States Supreme Court has revisited the issue of whether a statute can override an arbitration clause in a consumer agreement. This time, at issue was the remedial legislation entitled Credit Repair Organization Act (“CROA”), which provides consumers with “the right to sue a credit repair organization” that violates the Act.

In DIP Financing We Trust? Supreme Court of Canada to Hear Indalex Appeal

By Ronald Podolny on Posted in Bankruptcy and Debt, Case Previews, Contracts, Corporate Law

The Supreme Court has announced it will hear the appeal in the high profile Indalex Ltd., Re. The appeal is of great interest to the commercial litigation, insolvency and pension bar. Its outcome will be closely watched and may have dramatic impact on Canadian corporate reorganizations. Background The Indalex decision arose out of the insolvency… → Read More

U.S. Supreme Court Affirms a Policy Preference for Arbitration

By Ronald Podolny on Posted in Case Comments, Contracts, Procedure, Professions, Torts

The United States Supreme Court has allowed the appeal in KPMG LLP v. Robert Cocchi, reinforcing its policy preference for arbitrability, even in cases where some causes of action are arbitrable, while others are not. In particular, the Court stated that “[a] court may not issue a blanket refusal to compel arbitration merely on the… → Read More