SCC Weighs In on Exclusion Clauses
March 12, 2010
BY Alison Taylor
The Supreme Court of Canada has issued an important judgment on the vexing contract-law issue of enforcement of exclusion clauses. In Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), the court considered a sweeping exclusion clause that was intended to protect the provincial government from any liability arising in connection with the tendering process for design and construction of a highway. The court took the opportunity to give general guidance on the judicial review of exclusion clauses for unfairness, in the process clarifying that the old fundamental breach approach has been laid to rest for Canadian law and articulating a new test based on unconscionability and public policy.
Exclusion clauses are one aspect of a wide-ranging BCLI project on unfair contract that is currently ongoing, and that also addresses unconscionability, duress, undue influence, good faith, and misrepresentation.
To find out more about the BCLI’s Unfair Contracts Relief Project, please click here.
