Category Archives: Contracts

The Expansion of Unconscionability – The Supreme Court’s Uber Reach

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Case Commented On: Uber Technologies Inc v Heller, 2020 SCC 16 (CanLII)

Contracts of adhesion, or standard form agreements (SFAs) are oftentimes unfair. They are drafted by the stronger parties. Their provisions are dense and difficult to understand. The party signing does not have a say in their contents – they are take-it-or-leave-it agreements. They are usually lengthy and cannot feasibly be read in the short time it takes the parties to transact. Some of the more onerous terms are deeply embedded (hidden?) in the document. The contracts more often than not limit the liability of the drafting party at the expense of the other party. They ensure occupiers are not liable for negligence, including their own. And the list goes on.

We are not powerless against these contracts – common law and equitable doctrines protect weaker parties from harsh or onerous provisions. Is this enough? Probably not. Certainly the Supreme Court of Canada thought more should be done to protect weaker parties against SFAs in the case of Uber Technologies Inc v Heller, 2020 SCC 16 (CanLII). But instead of leaving this job to the legislature, as it should have, it expanded the reach of the doctrine of unconscionability without providing any substantial guidance or principles, thereby furnishing lower courts with an enormously powerful weapon to use against SFAs.

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Incorporating Waivers of Liability into Contracts

By: Jassmine Girgis

PDF Version: Incorporating Waivers of Liability into Contracts

Case Commented On: Apps v Grouse Mountain Resorts Ltd., 2020 BCCA 78 (CanLII)

Standard form agreements raise unique contracting issues. They are drafted by the more powerful party, they are take-it-or-leave-it agreements with no room for negotiation, and they typically contain waivers to limit the drafting party’s liability. And yet, most providers of services and/or goods use them to transact with the public. Given the fact that consumers rarely read these agreements before signing off on them, how can the requirement of consensus ad idem – i.e. a meeting of the minds – be established? Anticipated or expected terms do not give rise to this issue, but, if a clause is particularly onerous or unexpected, such as an “own negligence” clause, the drafting party must establish that the other party was notified of the clause, either through reasonable notice or previous experience. Otherwise, the clause will not be incorporated into the agreement.

These issues were raised in the recent BCCA decision in Apps v Grouse Mountain Resorts Ltd., 2020 BCCA 78 (CanLII) (Apps), a case involving a snowboarding accident at a British Columbia resort. After a summary of the decision, this post analyses the concept of knowledge when it comes to unsigned documents.

This post also argues that the current state of the law does not require as much as it should of occupiers, given the substantial benefit they derive from these waivers at the substantial cost to plaintiffs. It discusses the public policy choices involved in providing occupiers such broad scope to limit their liability, and proposes stricter rules to govern these kinds of clauses to better protect customers. Continue reading →

The Discoverability Principle Applies—No Seriously, For Real This Time—to Contract Claims in Alberta

By: Kyle Gardiner

PDF Version: The Discoverability Principle Applies—No Seriously, For Real This Time—to Contract Claims in Alberta

Case Commented On: Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49 (CanLII)

Last month, the Alberta Court of Appeal delivered its long-awaited decision in Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49 (CanLII) (Weir-Jones). The decision has been much anticipated largely because it clarified the correct standard of proof for summary judgment applications in Alberta (a balance of probabilities). As a bonus, the decision also provided clarification on another topic in which confusing and contradictory lines of authority had emerged in Alberta: the question of whether the discoverability principle applies when determining limitation periods applicable to breaches of contract in Alberta. Does a plaintiff’s limitation period for a breach of contract claim commence when the breach occurred, or when the plaintiff ought to have discovered that it had a claim?

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How does a coffee shop conversation become a binding contract?

By: Shaun Fluker

PDF Version: How does a coffee shop conversation become a binding contract?

Case Commented On: Schluessel v Margiotta, 2018 ABQB 615 (CanLII)

How many times have you walked into a Starbucks looking forward to a coffee break only to find all seats occupied by people working on a laptop? Their cup is empty, and has been for hours. Starbucks revolutionized the industry in many ways, certainly one of which was that the coffee shop became a social destination and later a business office. Free wifi and highly caffeinated beverages will do that. The contractual dispute which is the focus of this ABlawg post arose out of a conversation at one of these tables at a Starbucks. Schluessel v Margiotta is a cautionary tale to take care in what you say to others in coffee shops – it may cost you a lot of money! The case is also an illustration of the difficulties in legal reasoning which face a trial judge presented with a dispute over whether an oral contract has formed.

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Penalty Clauses: Inequitable, but Not Inherently Extravagant

By: Jassmine Girgis

PDF Version: Penalty Clauses: Inequitable, but Not Inherently Extravagant

Case Commented On: Super Save Disposal (Alberta) Ltd v Shenwei Enterprises Ltd, 2017 ABQB 805 (CanLII)

Overview

This is an appeal from a decision of the Provincial Court, which found that a purported liquidated damages clause was, in fact, a penalty clause. The court struck the clause down for being “extravagant and unconscionable”.

It was legitimate to find a clause comprised of gross profits to be “unfair and inequitable” in principle, but without knowing the value of the net profits and the difference between the two figures, it was problematic in this case to find its use to be “extravagant and unconscionable”, and “unreasonable and oppressive”. Continue reading →