Buyers Beware: The Fine Print In Your Contract Can Cost You!

A recent decision of the BC Supreme Court (DirectCash ATM Processing Partnership (a firm) v Main Food Stop (a partnership), 2018 BCSC 1851) highlights the importance of reading and understanding a contract before signing it and how not doing so can prove costly.

DirectCash ATM Processing Partnership (a firm) v Main Food Stop (a partnership), 2018 BCSC 1851

The plaintiff in this case was a supplier of ATMs and the defendant was a partnership that operated a convenience store. The defendant agreed to have the plaintiff's ATM placed in its store in exchange for a portion of the ATM fees. Following two brief meetings with a representative of the plaintiff, the defendant signed the plaintiff's standard form contract without reading it.

The contract required the defendant to keep the ATM operational for the duration of its six-year term. Two years into the term, the defendant sold its store and disconnected the ATM, thereby breaching the contract.

The contract provided that upon breach, the defendant must pay the plaintiff the expected profit that the plaintiff would have received from the operation of the ATM for the remainder of the term. The plaintiff estimated this amount to be $52,088.77.

The Defence

The defendant raised three defences, all of which were rejected by the court.

First, the defendant argued that contract was not binding because the plaintiff's representative had misrepresented the terms of the contract. Based on the plaintiff's representative's testimony to the contrary, the court rejected this argument.

Second, the defendant argued that the contract was not binding because the plaintiff's representative did not bring the cancellation terms to the defendant's attention.

The court noted that this defence arose from the decision of the Ontario Court of Appeal in Tilden Rent-A-Car Co. v Clendenning, 83 DLR (3d) 400. The court found that the "Clendenning defence" would require the defendant to prove that the plaintiff knew or ought to have known that the defendant did not consent to the cancellation terms. The cancellation terms were onerous, but not objectively unreasonable, and therefore the court...