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Contract Law

Updated for 2010 Changes to the Professional Engineers Act

These web pages have been updated to include both enacted and pending changes due to the Open for Business Act, 2010. Note that some changes will not be in force until proclaimed by the Lieutenant Governor; for example, the putting into force the end of the industrial exemption has been delayed numerous times.


All information on this website is provided without any warranty to its correctness. The material on these pages reflects Douglas Wilhelm Harder's best judgment in light of the information available to him at the time of its preparation. Any use which a third party makes of these pages, on any reliance on or decision to be made based on it, are the responsibility of such third parties. Douglas W. Harder accepts no responsibility for damages, if any, suffered by any third party as a result of decisions made or actions based on these pages.


A contract is a legal agreement between two parties which is enforceable in a court of law or by binding arbitration. In other words, a contract is an exchange of promises with a specific remedy for breach of those promises.

A contract must contain

  1. An offer which is made and accepted,
  2. Mutual intent to enter into the contract,
  3. Consideration,
  4. Capacity, and
  5. Lawful purpose.

A contract will contain a number of terms as well perhaps supporting documentation. A term requiring performance of one of the parties is said to specify an obligation for that party. An obligation essential to the contract is called a condition while a non-essential obligation is called a warranty. A term obligating a party to not do something is a negative covenant.

Interpreting a Contract

The rule of contra proferentem is used in interpreting the terms (i.e., against the party drafting the term) and while there may be implied terms (see The Moorcock, 1889), no addition or variation to the terms can be made by parol evidence (by verbal but not written terms).

Discharging a Contract

The contract is discharged (concluded) when all parties have satisfied their obligations, when there is an agreement to discharge, by the terms of the contract, or by frustration.

Breach of Contract

If a party, under the terms of the contract, fails to perform one or more obligations, it is said to be the defaulting party and it has breached the contract with the innocent party. The breach of an obligation may result in damages to the innocent party for which the innocent party may seek a remedy, but it requires a breach of a condition for the innocent party to consider the contract discharged by the breach.

To be completed...