Opinions and Current Issues Blog

Saba Ahmad is a Litigator working on environmental, administrative and commercial matters in Toronto. Learn more at www.sabaahmad.com

Basic Contract Principles Revisited #law #CDNlaw #litigation

Here’s a helpful decision reported in the Ontario Reports this week:

2195002 Ontario Inc. v. Tribute Resources Inc., 2012 ONSC 5412, at http://digital.ontarioreports.ca/ontarioreports/20130215#pg158

Starting at paragraph 24, Rady, J. canvasses the law in Ontario pertaining to the interpretation of contracts.

Photo Credit:  Saba Ahmad

Saba Ahmad

In this case, the disputant lessees required clarification on the status of their leases to extract and store gas and oil with a landowner.  The court reaches the crux of the matter at paragraph 40, stating it was disingenuous for the applicant to argue a storage lease supplemented an earlier extraction lease.  The latter lease was a replacement lease – not a supplementary lease – because it dealt with the same subject matter, but articulated broader rights and privileges. In light of the parties’ conduct, the court concluded original storage rights were no more, and granted the application of the subsequent lessee.

I note this decision because it’s often a challenge to find a good case that goes over very basic principles of contract law.  Citing numerous sources, Rady, J. does just that – succinctly and clearly.

I predict this decision will grace the pages when treatises by Waddams and Fridman are next updated.

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This entry was posted on February 18, 2013 by in Uncategorized and tagged , , , , , , , .

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