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Interpretation - Commercial Principles

. Harvey Kalles Realty Inc. v. BSAR (Eglinton) LP

In Harvey Kalles Realty Inc. v. BSAR (Eglinton) LP (Ont CA, 2021) the Court of Appeal held that commercial realities inform contractual interpretation:
[6] It is also well settled that courts should avoid commercially absurd interpretations of contracts. Commercial reasonableness must be interpreted from the perspective of both contracting parties: Resolute FP Canada Inc. v. Ontario (Attorney General), 2019 SCC 60, at para. 148.
. Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp.

In Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp. (SCC, 2020) the Supreme Court comments on the need for certainty in commercial contracts:
[44] On the other hand, there are very compelling reasons why general contract law principles should continue to apply to strata developments. Lord Mansfield’s old dictum that in commercial law “the great object should be certainty” is as relevant today as it was in the eighteenth century: Vallejo v. Wheeler (1774), 1 Cowp 143, 98 E.R. 1012, at p. 1017. In the same vein, this Court has stated that the common law of contracts should be developed in a way that “gives due weight to the importance of private ordering and certainty in commercial affairs”: Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494, at para. 66. In addition, this Court takes account of the “reasonable expectations of commercial parties” when contemplating a change to the common law: Bhasin, at paras. 32, 34, and 41. Abrogating the generally applicable principles of contract formation in the case of strata corporations would undermine commercial certainty and thwart the reasonable expectations of commercial parties by casting aside the wisdom and experience found in centuries of incrementally developed precedent and principle governing commercial relations. Rather than attempting to reinvent contract law to accommodate the novelty of strata property ownership, this Court can in my view do no better than to “avail [itself] of the general bank and capital of nations and of ages” by resorting to the settled and generally applicable principles established in the jurisprudence: E. Burke, Reflections on the Revolution in France (1790), at p. 84. Thus, the need for certainty in commercial affairs and the importance of protecting the reasonable expectations of commercial parties compel the continued ordinary operation of the common law in this area.
. 2484234 Ontario Inc. v. Hanley Park Developments Inc.

In 2484234 Ontario Inc. v. Hanley Park Developments Inc. (Ont CA, 2020) the Court of Appeal commented on commercial factors in contractual interpretation:
[64] The court should also seek to avoid an interpretation of a commercial contract that “would result in commercial absurdity”: Toronto (City) v. W. H. Hotel Ltd., 1966 CanLII 8 (SCC), [1966] S.C.R. 434, at p. 440; Ventas, at para. 24(d). Rather, commercial contracts are to be construed in accordance with sound commercial principles and good business sense, objectively rather than from the perspective of one contracting party: Kentucky Fried Chicken Canada v. Scott’s Food Services Inc., 1998 CanLII 4427 (Ont. C.A.), at para. 27. ...

[65] ... An interpretation that allows the contract to function in furtherance of its commercial purpose is preferred over one that does not: Humphries v. Lufkin Industries Canada Ltd., 2011 ABCA 366, 68 Alta. L.R. (5th) 175, at para. 15.
. 2099082 Ontario Limited v. Varcon

In 2099082 Ontario Limited v. Varcon (Ont CA, 2020) the Court of Appeal commented as follows on the role of commercial principles in contract interpretation:
[24] .... Varcon’s interpretation of the warranty would effectively make AWD — one of the many subcontractors on the project — a guarantor of any or all defects in the project, whether its own work has been defective or not. A plain reading of the warranty provisions does not support this position and does not accord with sound commercial principles and good business sense: All-Terrain Track Sales and Services Ltd. v. 798839, 2020 ONCA 129, at para. 27.
. Himidan v Farquarson

In Himidan v. Farquharson (Ont CA, 2019) the Court of Appeal articulated basics of contract interpretation:
[20] A contract must be interpreted in accordance with sound commercial principles and good business sense: Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205 (CanLII), 85 O.R. (3d) 254, at paras. 24, 50. On the appellant’s argument, she was agreeing to sell only a seven-foot strip of the driveway. If the appellant’s contentions against the neighbours are correct, namely that the appellant owned the other two-foot strip by adverse possession, then the APS was reserving that two-foot strip to her (because she was not including it in the sale). If the neighbours’ assertion is right, then the appellant was selling a seven-foot strip of a nine-foot-wide driveway under circumstances in which the neighbours could block the other two feet, interfering with the functioning of the driveway as it appeared at the time of the APS. In either event, the appellant’s proposed interpretation does not make commercial sense.


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