Huge changes have just hit the law of contract. You and every lawyer with whom you practice, at once must read C.M. Callow v. Zollinger 2020 SCC 45 (Dec 18).
Now no lawyer can negotiate, draft, interpret, or follow any kind of agreement without reading the decision. Note its big changes and possible corollaries or sequels. A lawyer must read it to advise any client about a dispute involving any contract. Many important aspects of contracts are now unreliable. Useful legal advice in some commercial or consumer matters now is probably impossible. Many situations offer no more than 70%, nor less than 30%, chance of success. Some are 50:50.
2014's “new philosophy” favoring summary disposition of lawsuits without a full trial, now is sometimes impossible. For example, the majority decision uses the word “reasonable”. Possible honesty or unreasonableness can prevent summary disposition and crawl through years of discovery. Coupled with court backlogs, enforcing many contracts may have become commercially impractical.
Firing an employee may now need slow preparation and careful advice at most steps.
It is now risky for your clients to deal with unknown customers. Especially difficult, unfriendly, or bureaucratic customers, whether as creditor or debtor. Maybe your first question to clients should be “How well do you know the other party?”
Options or one party’s contractual powers to grant or withhold or enforce rights, are much weaker now. Renewal or cancellation clauses can be traps. What used to be quick undoubted legal steps to help one party, now can be rickety muskets. They are apt to explode in your client’s face.
Contracts which make your client perform up front and then wait years to get repaid, can now be dangerous. All contracts’ security, and their default clauses, need rethinking. Clients should not put much reliance upon them. They sound good. But so do lottery tickets.
– Hon. J.E. Côté
The Commentaries are intended to call the attention of lawyers to promising or threatening developments in the law, in civil procedure, in developing their skills, or simply to describe something curious, funny or intriguing.
Justice Côté recently retired from the Court of Appeal of Alberta and currently acts as an arbitrator, mediator, or referee under Rules 6.44 and 6.45 of the Alberta Rules of Court.
He may be contacted through Juriliber at email: info@juriliber.com or phone 780-424-5345.
