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Contracts - Unconscionability (3). Wright v. Wright
In Wright v. Wright (Ont CA, 2026) the Ontario Court of Appeal allowed an appeal, here brought against the dismissal (as unenforceable) of an application "seeking enforcement of the Agreement or alternative relief", where the '(Property Partnership) agreement' ostensibly provided the appellants' with an "an option to purchase a residential property".
Here the court considered an issue of 'unconscionability':[103] Unconscionability is an equitable doctrine used to set aside “unfair agreements [that] resulted from an inequality of bargaining power”: John D. McCamus, The Law of Contracts, 2nd ed. (Toronto: Irwin Law, 2012), at p. 424, cited in Uber Technologies Inc. v. Heller, 2020 SCC 16, [2020] 2 S.C.R. 118, at para. 54. Assessing whether a bargain is unconscionable involves a two-stage analysis.
[104] First, the court must determine whether the parties’ respective bargaining positions were unequal, that is, whether one party could not “adequately protect their interests in the contracting process”: Uber, at para. 66. Although there are no rigid limitations on the types of bargaining inequality that may give rise to an unconscionable bargain, relevant considerations may include:. Differences in the parties’ wealth, knowledge, or experience;
. A party’s personal characteristics or vulnerabilities;
. A situation of dependence or trust and confidence between the parties; and
. Cognitive asymmetry, where “as a practical matter, only one party could understand and appreciate the full import of the contractual terms”: Uber, at paras. 67, 70-71. [105] If the court determines that the parties had unequal bargaining positions, it must then determine if, due to this inequality, the bargain unduly advantages the stronger party or unduly disadvantages the more vulnerable: Uber, at para. 74. Improvidence is assessed contextually, taking into account relevant considerations such as the difference between the price paid and the market price, the commercial setting, and the parties’ positions: Uber, at para. 75.
[106] The application judge concluded that Karin, Tamara and Ron had unequal bargaining power absent any finding that Karin was unable to protect her interests. This fell short of the analysis mandated in Uber. Karin and Tamara’s mother/daughter relationship, standing alone, is not sufficient to ground the determination required on the first stage of the unconscionability analysis.
[107] The evidence in this case furthermore does not support a finding that Karin was unable to protect her interests, because the essential aspects of her agreement with Tamara and Ron were negotiated after Karin had the benefit of independent legal advice.
[108] I conclude that the Property Partnership Agreement cannot be set aside as an improvident bargain, even if the application judge was of the view that it did not adequately account for Karin’s contribution to the purchase of the property. A bad bargain is not necessarily unconscionable. . Emond v. Trillium Mutual Insurance Co.
In Emond v. Trillium Mutual Insurance Co. (SCC, 2026) the Supreme Court of Canada dismissed an appeal, here brought against an order in the Ontario Court of Appeal that "ordered that the cost of replacement payable under the insurance contract does not include the compliance costs" with building requirements imposed by the local conservation authority.
The court considers the contractual principle of 'unconscionability', here in an insurance context:[64] As Trillium rightly acknowledges, the doctrine of unconscionability already provides that insurance contract terms, properly interpreted, can be displaced for fairness reasons external to the interpretive exercise (R.F., at para. 139, citing Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69; see also Uber Technologies Inc. v. Heller, 2020 SCC 16, [2020] 2 S.C.R. 118). Relief on the basis of unconscionability “requires both some kind of unfairness and a substantively unfair transaction” (A. Swan, J. Adamski and A.Y. Na, Canadian Contract Law (4th ed. 2018), at §9.171 (emphasis in original)). As the Court noted in Uber, at para. 77:Where the weaker party did not understand or appreciate the meaning and significance of important contractual terms, the focus is on whether they have been unduly disadvantaged by the terms they did not understand or appreciate. These terms are unfair when, given the context, they flout the “reasonable expectation” of the weaker party or cause an “unfair surprise”. [Citations omitted.]
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