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Facts[]

The two parties had entered into a contract whereby Dominion, operating under the name ADT, provided Fraser with a new protective signalling system, and monitored such system for an annual fee of $890. Fraser's store was robbed and the alarm system was activated, however, ADT did not respond immediately and the robbers escaped with $50,000 worth of jewellery.

The trial judge found that company was negligent by not promptly notifying police when the alarm sounded, and that the negligent activity made a limitation of liability clause in the contract unenforceable as security company had committed a fundamental breach of the agreement. In the alternative, the limitation clause was unconscionable because no honest and fair man would have expected that liability would be limited in the circumstances to only $890.

Issue[]

  1. Does a fundamental breach render a limitation clause unenforceable?

Decision[]

Appeal allowed in part.

Reasons[]

Robins, writing for the court, was not persuaded that there was any valid basis for interfering with the factual findings of the trial judge. There was sufficient evidence to conclude that the robbers would have been caught if ADT had not negligently delayed in contacting the police. However, the limitation of liability clause was enforceable. The company's negligence in failing to respond appropriately to the alarm could not be equated to a fundamental breach. In addition, the clause was not unconscionable. The provision was reasonable in the commercial context of this case, the contract was clear and unambiguous, and the clause was highlighted in bold black letters. Accordingly, the company was only liable in the amount of $890.

Ratio[]

A post-Hunter case which demonstrates the approach generally taken - that both Dickson's and Wilson's approach will generally yield the same result.

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