The rules of contractual interpretation have evolved significantly in the last several years in Canada. At one time, the circumstances surrounding the preparation of a contract were rarely considered by the courts; the courts preferred to look within the “four walls” of the contract to interpret ambiguous phrases or to resolve uncertainties. More recently, however, the courts have begun to consider all of the circumstances involved in the drafting of the contract in order to give meaning to it and to ensure that the intention of the parties is carried out.
On September 10, 2014, the Court of Appeal for Ontario released a decision applying the Supreme Court of Canada’s recent ruling dealing with contractual interpretation and the standard of review for contractual disputes.
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