Category Archives: Contract

Pay When Paid Clauses

Pay when paid clauses are highly contentious provisions in the construction industry that all sub-contractors need to be aware of.  In the normal course, a contractor must continue to pay a sub-contractor whether or not the contractor has been paid.  A pay when paid clause (PWP clause) will alter the normal course and permit the contractor to withhold paying a sub-contractor until the contractor is paid by the party above it in the construction pyramid.

Primer on Fraudulent Conveyance Claims

The Fraudulent Conveyances Act provides that the court can declare a transfer of property void if the intention of the person who made the transfer was to defeat or delay his or her creditors. [1]  This can happen where an individual is attempting to hide assets from a creditor or ex-spouse.

The statute is designed to stop a debtor from hiding assets from creditors by fraudulently transferring the assets to another person.  If it is applicable, an Order under the statute makes property that was fraudulently conveyed available for execution on behalf of the creditors of the transferor.[2]

Update on the Duty to Perform Contracts Honestly

Just over a year ago the Supreme Court arrived at its decision in Bhasin v. Hrynew where the Court established that there is a free standing duty of honesty in contractual performance, which essentially means that “parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract”.  I previously wrote about that decision here.

The Bhasin decision has since been considered in over 95 decisions across Canada, over 40 of which are from Ontario.   Below is a brief summary of several recent Ontario decisions where a breach of the duty to perform honestly has been found to have occurred.

Insurer’s Duty to Defend – All Pleadings Matter

From time to time a situation will arise where there are disputes between an insurance company and a potential insured party as to whether coverage will apply to a particular situation and/or a particular individual or entity (the “Potential Insured”) where the Potential Insured has been claimed against.  For example, a Potential Insured is sued for allegedly causing injury to someone passing in front of his house, but it is unclear if the person was injured on the sidewalk (public property) or the Potential Insured’s property (which is covered by the Potential Insured’s home insurance policy).  The Potential Insured’s insurance company claims that it is not required to defend the claim because the injured party may have been off the Potential Insured’s property at the time the injury took place.

Loans and Limitation Periods

There are almost an infinite variety of loan formats and types.  At the more formal end you have mortgages and at the other end of the spectrum you have personal oral agreements between family and/or friends.  Then there is everything else in between.  Regardless of the type of loan, what the lender needs to be aware of is when his or her rights to enforce and collect on that loan will legally expire, because once the right is lost it cannot be revived.