Case Brief Wiki
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Facts[]

The government of Canada reached out to CAE Industries as it wished for the company to take over and run an aircraft maintenance base no longer required by Air Canada. An agreement was made between the government and a subsidiary of Cae Industries, Northwest Industries, which contained many vague statements, but essentially stated that although the base usually generated 700, 000 man-hours per annum, the Government could not commit to guaranteeing more than 40,000-50,000 during 1971-1976 but they would employ their "best efforts" to increase this number and get it closer to the target 700, 000 hours. The contract was formed, but in 1971, the hours fell below 40, 000 and CAE Industries sued for breach. They were successful at trial, which the Crown appealed.

Issue[]

  1. Are the terms in the contract so uncertain that they render the contract unenforceable?

Decision[]

Appeal dismissed.

Reasons[]

Stone, writing for the majority, determines that the parties definitely intended to enter into a contract – particularly because they acted as if they did until the respondent brought this action (part performance as per Foley). The onus is on the Crown to prove that the parties did not intend to enter into a contract and they failed to prove this. Stone then carefully scrutinizes all of the "uncertain" clauses cited by the Crown and determines that none of them are so vague as to render no meaning to the contract. He states that in business relationships the courts must make every effort to interpret vague terms and determine their intended meaning at the time the contract was formed. He determines that the Crown guaranteed a certain amount of work, and this was not provided; therefore, the Crown breached the contract.

Ratio[]

In business relationships, the courts will make every effort to apply definite meaning to vague terms in a contract so as not to render it unenforceable; this is especially true if it is obvious that the parties intended to enter into a binding relationship, or if there was part performance.

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