Que. CA limits scope of indemnity clause
June 10, 2011
The courts will narrowly construe the scope of contracts even though the wording of the contract may be very broad, says Jean-François Michaud in the Lawyers Weekly.
Excerpt
In a ruling applauded by business and insurance companies but lamented by municipalities, the Quebec Court of Appeal recently limited the application of a broad indemnity clause that sought to transfer all the risks related to contract performance to a contractor.
The appeal court held that the City of Montreal could not receive compensation for damages stemming from a snow removal accident because the city itself was at fault.
“The judgment sends the message that the courts will narrowly construe the scope of contracts even though the wording of the contract may be very broad,” remarked Jean- François Michaud, an insurance law expert with Norton Rose OR LLP.