This article has been republished with permission by The Alberta Broker Magazine.
The general principles of contractual interpretation require a decision-maker to read the contract before them as a whole, giving the words used their ordinary and grammatical meaning, in a manner consistent with the surrounding circumstances known to the parties at the time of formation of the contract. While remaining faithful to the actual language of a contract and without deviating from those words, the decision-maker may consider surrounding circumstances (often called the “factual matrix”) to aid in contractual interpretation.
Standard Form Contracts Are Unique
These principles are set out by the Supreme Court of Canada (the “Supreme Court”) in Creston Moly Corp v Sattva Capital Corp,1 and they apply broadly. However, subsequent to Sattva, courts disagreed on whether the interpretive principles articulated in that decision also applied to standard form contracts—some appellate courts said they did, some said they did not. As a result, two years later, the Supreme Court clarified in Ledcor Construction Ltd v Northbridge Indemnity Insurance Co2 that standard form contracts (e.g.