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Adhesion Contracts

. Celebre v 1082909 Ontario Limited

In Celebre v 1082909 Ontario Limited (Div Ct, 2007) a clause in a home inspection agreement purporting to limit liability was not enforced in a 'contract of adhesion' (supplier-issued standard consumer contract) where there was no true negotiation and consideration of the terms before the contract is executed, where the consumer was under time pressure to close a house sale, and where the contract was only presented for consumer signature after part of the inspection work had been completed:
[13] While it is the case that the contract was signed, it does not follow that the limitation of liability clause is enforceable. The contract is one of adhesion, a consumer standard-form, and not the result of negotiation and the circumstances typically are that there is a limited time allowed in the contract of purchase and sale for the buyer to have a home inspection done. The buyer is not normally in the position of being able to have a second inspection done; there simply is not time. At its best for the appellant, this contract was not presented for signature and was not explained until the entire inspection of the exterior had been completed. At that point the buyer is not, in practical terms, able to reject the contract and engage another inspector. The inspector has done much of the work and will expect to be paid for it. There is thus a pressure applied by the practice of delaying the explanation and signature until after much work has been done. This was described by the inspector as his usual practice. It seems to me that this practice is not a fair one. If there are particularly onerous terms in a contract of adhesion, the duty of the inspector is to explain the term at a time and in a manner that gives the customer a real opportunity to refuse and to find an alternate inspector.

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