Assessing Exclusion Clauses: The Supreme Court of Canada’s Three Issue Framework in Tercon Contractors Ltd v British Columbia(Transportation and Highways)

• Author(s) / Creator(s)

  • O'Byrne , Shannon

• Introduction The Supreme Court of Canada's 2010 decision in Tercon Contractors Ltd v British Columbia (Transportation and Highways ) concerned the enforceability of a broadly drafted exclusion clause in the context of public procurement tendering. It is noteworthy for several reasons. First, the decision unanimously articulated a three-issue framework for determining the enforceability of exclusion clauses. Second, and on a more theoretical front, Tercon offered competing visions as to how contracts are to be interpreted. Though the Supreme Court was unanimous that parties to a contract should--of course--generally be bound by its terms, the majority and dissent followed significantly different paths for determining the scope of the agreement at bar. Justices LeBel, Deschamps, Fish, Charron, and Cromwell (in a majority decision delivered by Cromwell J.) approached the task of contractual interpretation by elevating the long-standing and judicially enforced values that specifically inform the tendering process including notions of integrity, transparency, and business efficacy. The dissent, per McLachlin C.J., Binnie, Abella, and Rothstein JJ., in a judgment delivered by Binnie J., emphasized another set of long-standing and judicially enforced values, namely freedom of contract and fidelity to the legal principle that contracts are to be enforced according to their words. And third, the Supreme Court of Canada laid to rest the doctrine of fundamental breach as it applies to exclusion clauses--or attempted to at least. In order to explore these themes, this comment provides a brief account of the facts of Tercon and the ...

• Date created

  2012

• Subjects / Keywords

  • Interpretation
  • Contracts law
  • Transportation
  • Transparency
  • Enforceability

• Type of Item

  Article (Published)

• DOI

  https://doi.org/10.7939/R3NZ81147

• License

  © 2012 Shannon O'Byrne. This version of this article is open access and can be downloaded and shared. The original author(s) and source must be cited.