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Canadian Animal Law

Interpretation - Objective Factors Only

. 2484234 Ontario Inc. v. Hanley Park Developments Inc.

In 2484234 Ontario Inc. v. Hanley Park Developments Inc. (Ont CA, 2020) the Court of Appeal comments that a contract is to be assessed by the objective behaviour of the parties, not what they 'meant' subjectively:
[51] The principles of contractual interpretation exclude consideration of either party’s subjective intention in determining whether the parties reached an agreement. In Olivieri v. Sherman, 2007 ONCA 491, 86 O.R. (3d) 778, at para. 44, this court re-stated the principle that only objective factors are relevant in determining whether the parties reached a consensus:
As was stated by Middleton J.A. in [Lindsey v. Heron Co. (1921), 1921 CanLII 538 (ON CA), 64 D.L.R. 92 (Ont. C.A.)] at 98-9, quoting Corpus Juris, vol. 13 at 265:
The apparent mutual assent of the parties essential to the formation of a contract, must be gathered from the language employed by them, and the law imputes to a person an intention corresponding to the reasonable meaning of his words and acts. It judges his intention by his outward expressions and excludes all questions in regard to his unexpressed intention. If his words or acts, judged by a reasonable standard, manifest an intention to agree in regard to the matter in question, that agreement is established, and it is immaterial what may be the real but unexpressed state of his mind on the subject.
[52] Equally, evidence of a party’s subjective intention is irrelevant to what the parties’ agreement means: Eli Lilly & Co. v. Novopharm Ltd., 1998 CanLII 791 (SCC), [1998] 2 S.C.R. 129, at para. 54; Sattva, at paras. 59-61.

[53] The principle that subjective intentions are ignored when interpreting an agreement is also applicable to interpreting an antecedent agreement in rectification cases: McLean v. McLean, 2013 ONCA 788, 313 O.A.C. 364, at para. 61. In Fairmont, at para. 29, the court quoted the following from the English Court of Appeal in Frederick E. Rose (London) Ld. v. William H. Pim Jnr. & Co., [1953] 2 Q.B. 450 (C.A.), at p. 461:Rectification is concerned with contracts and documents, not with intentions. In order to get rectification it is necessary to show that the parties were in complete agreement on the terms of their contract, but by an error wrote them down wrongly; and in this regard, in order to ascertain the terms of their contract, you do not look into the inner minds of the parties — into their intentions — any more than you do in the formation of any other contract.


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