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Construction Law In Ontario – Construction lawyer

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Construction Law In Ontario – Construction lawyer

Given that the construction industry is leading the Canadian economy, special considerations must be made with respect to construction contracts. Construction contracts govern the legal obligations and rights between contractors. There are standard forms of contracts that can be found with the Canadian Construction Documents Committee (the “CCDC“). The CCDC provides contract forms for a variety of construction projects.

The Royal Architectural Institute of Canada (the “RAIC“) also provides some forms, which we have discussed in an earlier published article in our blog. The Canadian Construction Association (the “CCA“) also provides a variety of standard forms. The three levels of government (municipal, provincial and federal) may also publish construction contracts for their projects.

Typical Legal Risks That A Contractor Faces In Ontario

Because the most common form of contract in the construction industry allocates risk to the contractor when it comes to terms governing:

  • the Price
  • any Warranties
  • the Performance of the Construction Work
  • and the Schedule

Changes are usually permitted which allows contractors to have time extensions, or receive compensation beyond the fixed price of the contract if the cause is beyond the contractor’s control. This may adversely impact the owner.

Legal Limits to Excluding Liability in Construction Law

As always, limiting liability has its own legal limits. In other words, you can only limit liability to a certain extent. The courts plainly interpret exclusion clauses in construction contracts. They take the literal meaning. However, if the exclusion clause is unconscionable and/or overrides public policy or if there is a public policy concern to justify ignoring or not applying the clause, the court may find the exclusion to be invalid (see Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), SCC, 2010).

Although standard contracts do not include caps on liability, parties’ lawyers may include one, which we can assist you with in your construction contracts. The cap can cover the price for the services, the insurance coverage in the contract or the loss resulting from injuring a worker.

Valid Legal Exclusion in Construction Contracts

“Force Majeure” is an event that is unforeseeable and not in the control of the parties. Force majeure makes the performance of the construction contract impossible, otherwise it would not be legally considered “force majeure” nor would that event benefit from the advantages of a force majeure defense. Force majeure events include natural disasters, fire, wars, acts of terrorism, pandemics or epidemics..etc.

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