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Contracts - Interpretation

First Elgin Mills Developments Inc. v. Romandale Farms Limited (Ont CA, 2014)

In this Court of Appeal case the court briefly stated a principle of contract interpretation specific to business contracts:
[49] ........... A court may imply a term in a contract where doing so is necessary to give effect to the intention of the parties and to give business efficacy to the agreement: see M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., 1999 CanLII 677 (SCC), [1999] 1 S.C.R. 619, at paras. 27-29. Further, it must be obvious that the parties intended the contract to include such a term before a court will imply it.

[50] In my view, the term implied by the application judge, that the price adjustment process had to be completed (or, at least, commenced) by the fifth year of the mortgage, does not make business sense in the context of this case and does not meet this standard for implying a contractual term: see Venture Capital USA Inc. v. Yorkton Securities Inc. 2005 CanLII 15708 (ON CA), (2005), 75 O.R. (3d) 325, leave to appeal to S.C.C. dismissed, [2005] S.C.C.A. No. 334.

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