Capacity of a Will-Maker and Undue Influence

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Capacity of a Will-Maker and Undue Influence:

Jung Estate v. Jung Estate, 2022 BCSC 1298 (“Jung Estate”) is an instructive case regarding testamentary capacity, the testator’s knowledge and approval of the contents of their Will, and the concept of undue influence. By way of background, the testator in Jung Estate was Rose Jung. Rose was described by witnesses as passive and non-confrontational. She left two surviving children: Steven and Jerry. Her assets consisted of a house worth over $1.6 million and the residue of her estate, which was fully spent in paying the expenses of her estate. Multiple factors brought Rose’s capacity into question and caused suspicion around her knowledge and approval of her Will. She made a new Will in 2017, just one month before her passing, although she’d also made a Will in 2001. Despite Rose’s history of treating her sons equally, which was reflected in her 2001 Will, the 2017 Will essentially disinherited Steven, yet offered Jerry a gift of over $1.6 million. Steven started the action; after he passed away, his wife took over the litigation, as she was the executor of Steven’s estate. The action successfully invalidated Rose’s 2017 Will.

In Jung Estate, the court laid out the law surrounding testamentary capacity. It stated that the formal validity requirements of the Will having been met lead to the presumption that Rose, as the testator, had necessary capacity as well as knowledge and approval of the contents of her Will. However, the presumption was rebutted due to the suspicious circumstances raised. The burden to prove the validity of the Will then shifted to Jerry: the person seeking to show the Will was valid. In making its ultimate finding that Rose did not have the requisite capacity, the court discussed and highlighted some of the circumstances that raised suspicion.

In looking to the details of Rose’s situation, the court held that testators must have a disposing mind and memory, such that they appreciate the nature and extent of their assets, as well as the consequences of their Will. The court noted that Rose could not comprehend the value of $1 million, nor did she understand that her gift to Steven, being the residue of the estate, had essentially no value. She did not appreciate the consequences of her 2017 Will. While the lawyer who assisted Rose with her 2017 Will, Mr. Micner, had arranged for a specialist to assess Rose’s capacity, the specialist noted that Mr. Micner “provided him with ‘the softest definition’ of testamentary capacity he had ever received from a lawyer”. The specialist noted that Rose didn’t understand the extent of her wealth, nor could she manage her finances.

Looking to Rose’s poor health at the point she made and executed her 2017 Will, the court noted that Rose became depressed after her husband’s death, and began suffering memory issues and frequent falls starting in 2012. Her health deteriorated to the point that she needed full-time care by 2016, having issues including heart problems, renal dysfunction, and dementia. Rose was a vulnerable individual.

The court also noted the degradation of the relationship between Steven and Jerry. It discussed how the brothers’ relationship took a marked decline after Jerry went through an acrimonious divorce. Steven, a lawyer, had assisted Jerry for some time through the litigation, but was forced to step away due to significant health issues. Jerry was very hurt. Jerry became alienated from his family; he eventually began refusing to visit Steven, even for the holidays. Near the point of Rose’s death, Jerry had began refusing to communicate with Steven about their mother’s care, and refusing to recognize Steven’s power of attorney (with Rose as the subject) or to provide him with receipts.

While the court found that Rose lacked capacity to have validly made or signed the Will, and as such the Will was invalid on the ground of capacity alone, the court went on to discuss markers of a testators’ knowledge and approval. The court discussed the differences between capacity versus knowledge and approval; it stated that capacity includes a person’s ability to make choices, while knowledge and approval include the testator’s ability to understand and approve of their choices. For proper knowledge, the testator must be aware of the magnitude of their estate and the effects of their chosen dispositions. The Will was held to be invalid on this ground too, in addition to the ground of inadequate testator capacity.

Finally, the court explored the possibility that Jerry had unduly influenced Rose. The court held that the Wills Estates and Succession Act (WESA) requires that a party claiming undue influence must show the potential for dependence or domination of the testator. If they’re able to show that potential, the onus to prove that the testator’s will was not overborne through undue influence falls on the person seeking to validate the Will. The court noted that Jerry had the potential for dominance for several reasons. First, Rose was very susceptible to financial abuse. Second, Jerry was instrumental in causing temporary alienation between Rose and Steven. Further, Jerry made the arrangements for Rose to meet with Mr. Micner. While the potential did exist, the court held that Jerry had not exerted undue influence over Rose. Jerry had respected Mr. Micner’s instructions that meetings with Rose must occur without Jerry’s presence, and Jerry further respected Rose undergoing an independent medical assessment.

Jung Estate serves as a guideline of factors that may cause an individual’s Will to be held as invalid. The case warns lawyers of the importance of proper documentation around a testator’s capacity, as well as around any suspicious circumstances or interactions. Estate litigation can be time-consuming, emotional, and costly. The lawyers at Heath Law LLP are experienced in preparing enforceable Wills that meet the needs of testators and recognize the rights of beneficiaries.

If you have questions about preparing a will, contact us today to schedule a consultation.

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The Death of a Child’s Guardian

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Parents are considered guardians of their children at law, and issues can arise if a guardian passes away. If a guardian passes away, there are family law rules to consider that determine who will become the child’s guardian. These considerations apply to children under the age of 19.

If two parents were the joint guardians of the child, and one passes, the surviving guardian will assume sole guardianship and all parental responsibilities, unless a Court Order or agreement states otherwise. If only one parent was the child’s guardian, and they pass, the other parent does not automatically become the sole guardian. That said, the surviving parent of a child who is not a guardian may be appointed as guardian through an application to Court under the Family Law Act. This may be the case if one parent solely raised the child, while the non-guardian parent did not spend any regular time with the child. If a child does not have a guardian for a duration of time, the Public Guardian and Trustee (the PGT) will step in. The PGT is a BC corporation with the goal of protecting individuals who do not have legal capacity, such as children.

A parent who is a guardian of a child may choose to appoint a successor guardian. The guardian can do this through their Will or specified form under the Family Law Act. It is important to remember that the successor guardian cannot be granted more rights than the recently deceased guardian. Further, appointments of successor guardians can only be made in accordance with the “best interests of the child” principles. These principles are involved in nearly all aspects of family law and require that the best interests of the child be considered, such as the child’s mental and physical well-being.

The law surrounding guardianship can be complex. The experienced lawyers at Heath Law LLP are happy to assist you with family law and other types of legal matters.

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What Happens in BC When a Person Dies Without a Will?

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What happens when a person dies without creating a will?

In BC, when a person dies without creating a will this is referred to as intestacy. Intestacy prompts the obvious question: what happens to the person’s assets? The Wills, Estates, and Succession Act, S.B.C. 2009, c. 13 (WESA), establishes a standard asset distribution scheme in the event of intestacy. In general, the intestate’s (deceased’s) spouse is first in line but their share of the assets depends on whether the intestate had children or descendants. Other relatives may also be entitled to a share if there is no spouse or children. However, before any assets are distributed, the court must appoint an administrator of the estate.

An administrator of an intestate estate has various responsibilities including the disposition of the remains, collecting and documenting assets and liabilities, keeping expense records, identifying potential beneficiaries, and eventually distributing the assets. Section 130 of WESA gives priority to the spouse to be appointed as administrator and gives them the ability to nominate an alternate. If the spouse is not appointed, the children of the deceased are next in priority order. Additionally, the consent of the majority of the deceased’s children can affect which child is ultimately appointed. If neither the spouse nor the children of the deceased are appointed, the court may appoint a person they consider appropriate in the circumstances.

According to section 25 of WESA, the standard asset distribution scheme will apply when there is no will (i.e. intestacy has occurred), as well as when a will is silent on the status of a part of the estate (partial intestacy). The starting point for distribution is always the spouse. WESA defines “spouses” as married people or people living in a “marriage-like relationship” for at least two years. People will no longer be spouses if they terminate their relationship, or in the case of marriage, divorce. Notably, WESA will not consider a couple “separated” if they begin living together again within one year of separation for the purpose of reconciliation, or for one or more periods totalling more than 90 days. If a person dies with a spouse but no children, section 20 of WESA determines that the spouse is entitled to the entire estate. Section 21 describes other possibilities: if there is a spouse and children, the spouse is entitled to the household furnishings and $300 000 with the remainder being split equally with half to the spouse and half to the children. If the children are from a deceased’s previous relationship, the $300 000 is reduced to $150 000. Spouses are entitled to their $300 000 (or $150 000) before any assets are distributed to the children. This means that if the total value of the estate is less than those amounts, the spouse will be entitled to the entire estate. In the rare circumstance that an intestate had two or more spouses, section 22 directs the surviving spouses to come to an agreement. If they cannot, the court may decide what happens for them.

If there is no spouse but the deceased had children, section 23 of WESA says the children split the estate equally among themselves. Section 23 goes on to detail which other relatives may be able to claim interest in the estate if there is no spouse or children. In priority order, these are parents, siblings, grandparents, siblings of parents and cousins, great grandparents, and descendants of great grandparents (second cousins etc.). If none of these relatives can be found, the estate will “escheat” to the provincial government according to section 23(2)(f) of WESA. This means that the government will be entitled to the deceased’s assets.

Finally, if a person dies without a will and there are no surviving guardians for a child, the default is that the director under the Child, Family and Community Service Act becomes the personal guardian of the child and the Public Guardian and Trustee becomes the property guardian of the child. If a family member or other interested person wishes to become a guardian, they must apply to the court under section 51 of the Family Law Act for an order appointing them. The court bases this decision on the best interests of the child and as such the court has final discretion on who may become the guardian.

Overall the framework created by WESA provides a clear pathway for resolving how an intestate estate must be distributed as well as the care and guardianship of any surviving minor children.

If you don’t have a will, or you’re ready to begin estate planning so your beneficiaries receive their intended inheritance, contact Heath Law 

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The Federal Child Support Guidelines Child Support Table

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The Federal Child Support Guidelines Child Support Table was updated effective November 22, 2017, to account for tax and other changes since the previous Child Support Table came into effect on December 31, 2011.

The minimum gross annual income at which the Child Support Table applies was increased from $10,820.00 under the 2011 Table to $12,000.00 under the 2017 Table. As a result, the Table no longer specifies a child support amount for payors living in British Columbia with an annual income of $11,999.00 or less.
For child support payors living in British Columbia with an annual income of between $12,100.00 and approximately $27,000.00 (depending on the number of children for which support is being paid), specified child support decreased under the 2017 Table.

For child support payors living in British Columbia with an annual income exceeding approximately $27,000.00, specified child support increased under the 2017 Table.
The maximum annual income for which child support is specified remains unchanged at $150,000.00. Beyond that income, there is a formula upon which child support is based.

For example, a payor living in British Columbia with an annual income of $17,000.00 paying child support for one child will now pay $111.00 per month under the 2017 Table as opposed to $133.00 per month under the 2011 Table. A payor living in British Columbia with an annual income of $75,000.00 paying child support for 3 children will now pay $1,522.00 per month under the 2017 Table as opposed to $1,483.00 per month under the 2011 Table.

While the changes to the Table were relatively minor, over time the difference in the amounts being paid and amounts otherwise payable may add up. If you are required to pay child support or receive child support as a result of an order made prior to November 22, 2017, we would encourage you to consult with a lawyer to ensure that a child support underpayment or overpayment does not accumulate.

Note that the Family Law Act will only allow a court to change, suspend or terminate an order respecting child support if certain conditions are met (see section 152). A court will require the parent seeking to vary the order to show that there has been a change in circumstances, evidence of a substantial nature that was unavailable when the order was made has become available, or that there was evidence of a lack of financial disclosure by a party that was discovered after the order was made. If one of the following applies to your situation, we recommend speaking to a lawyer about your options and your chances of success should you seek to change the child support amount payable or receivable.

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Update and reminder! URGENT: B.C. LAND OWNER TRANSPARENCY REGISTER (“LOTR”)

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URGENT: B.C. LAND OWNER TRANSPARENCY REGISTER (“LOTR”)

We write to advise that effective November 30, 2021, the B.C. Government requires that
any Corporation, Trust or Partnership that owns an interest in real estate must file a
Land Owner Transparency Report with the Land Owner Transparency Registry.
Failure to file may result in government-imposed penalties.

What is the Land Owner Transparency Registry?

The Land Owner Transparency Registry is a publicly searchable registry of information about
beneficial ownership of land in British Columbia. Beneficial land owners are people who own or
control land indirectly, such as through a corporation, partnership, or trust.

The Registry is intended to end hidden ownership of land and combat money laundering in B.C.
The B.C. provincial government created the LOTR to identify the individuals that actually own
real estate in the province.

Does the Land Owner Transparency Registry apply to you?

With few exceptions, all corporations, partnerships, and trusts that own real estate in British
Columbia must register. Trusts include formal trusts, bare trusts, and prescribed trusts.

What do you need to do?

If you own an interest in land in a corporation, partnership, or trust, you must prepare and
register a Transparency Report with the LOTR by November 30, 2022. An interest in land
includes a fee simple interest, life estate, or long-term lease.

Only a Legal Professional can register the Report.

The Transparency Report contains information about:

1. The corporation, partnership, or trust that owns real estate (“Reporting Bodies”);
and,

2. The individuals who are beneficial owners of the corporation, partnership, or
trust, as well as settlors of trusts (“Interest Holders”).

The Transparency Report discloses information about Interest Holders, including:

1. Name
2. Citizenship
3. Social Insurance Number (or Individual Tax Number)
4. Date of Birth,
5. Residency for Tax Purposes, and
6. Address

Only some of this information will be publicly searchable, and certain Interest Holders are
eligible to restrict what is available to the public. Government agencies will have access to all
information. All Interest Holders must be advised that their personal information was included
in a Transparency Report and a special letter giving notice under the legislation must be
provided to the Interest Holder.

The Transparency Report must be uploaded to the LOTR Registry online.

The report must also be updated when the information concerning the Interest Holder changes, for
example, a change in residential address, name, or ceasing to be an interest holder.
Specific reporting requirements apply for each type of corporation, partnership, trust, and
Interest Holder.
A failure to prepare and upload a Transparency Report may result in the government pursuing
administrative penalties of up to $50,000 or 5% of the assessed value of the real estate.

What can Heath Law LLP do to help?

We have a team of lawyers and staff well versed in preparing Transparency Reports and
compliance under this new LOTR legislation.

Please advise our office by November 1, 2022, if you own real estate in a corporation, trust or
partnership, and if you would like our assistance in preparing and filing a Land Owner
Transparency Report.

Yours truly,
HEATH LAW LLP

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Surrogacy and the Law in British Columbia

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Surrogacy is when a woman enters into an agreement with intended parents to carry a child that she will not be a parent to. This can be done either with the surrogate’s DNA or an implanted embryo. One, both, or neither of the intended parents may contribute reproductive assistance to the creation of the child. Surrogacy is highly regulated in Canada. Unlike in other countries, such as the United States, surrogates in Canada cannot be paid or compensated to be a surrogate. The Assisted Human Reproduction Act (“AHRA”) governs surrogacy and it sets out among other things, strict rules for how surrogates can be reimbursed for expenses.

Assisted human reproduction in Canada is considered altruistic and cannot be done for profit. Because surrogacy is an altruistic endeavour, surrogates also must not suffer any loss; thus the ways they may be reimbursed for specific expenses are set out in the AHRA and in the applicable Regulations. This includes documented travel expenses, medical expenses, groceries, any loss suffered to income as a result of the pregnancy so long as a medical practitioner has signed off on the loss, and other related expenses (with receipts). Additional compensation by the intended parents to any party involved with the surrogacy (the surrogate, any agency assisting with finding a surrogate, other donors etc.) can result in penalties under the AHRA. Speaking to a lawyer who specializes in fertility law to understand how intended parents can thank their surrogates is highly recommended.

While surrogacy is regulated at the federal level, especially in regards to compensating surrogates, it is also governed by the BC Family Law Act (“FLA”). The FLA defines “assisted human reproduction” as a means a method of conceiving a child other than by sexual intercourse. Reproduction through sexual intercourse would not qualify to be a surrogacy in BC, but would rather require that the intended parents enter into an adoption agreement with the birth mother.

BC has a fairly comprehensive statutory approach to surrogacy and covers that a donor (surrogate, egg, sperm, or the like) is not automatically considered a “parent” based solely on the donation (s. 24 FLA). BC law requires that intended parents and surrogates go through a two-step process: a surrogacy agreement prior to conception, and written consent of the surrogate after the birth (s. 29 FLA). Note that if a surrogacy agreement/ arrangement is not entered into prior to the conception, then the birth mother will be considered the child’s parent under s. 27 of the FLA.

The requirements for a surrogacy agreement are set out in s. 29 of the FLA which must include that

  • it must be in writing,
  • be made before the child is conceived through assisted reproduction, and
  • confirm that the birth mother will not be a parent of the child (FLA s. 29(2)).
  • Upon the birth of a child born as a result of assisted reproduction, it must be confirmed that no party to the agreement withdrew prior to the conception, and
  • the surrogate must give written consent to surrender the child to the intended parents (FLA s. 29(3)).
  • To be a surrogate, a woman must be at least 21 years of age (AHRA s. 6(4)).

Additionally, though not required, it is recommended for the safety of the surrogate that only women who have previously given birth become a surrogate. When considering surrogacy, either as a surrogate or intended parents, it is important to have a comprehensive agreement to set out the expectations of all parties. Because it is not required in BC to get a court order declaring parentage, and intended parents can be parents to the child born through surrogacy so long as there is a valid agreement, ensuring their is a written agreement between the intended parents and the surrogate is crucial. Consulting a lawyer prior to the conception of a child and prior to entering into such an agreement is strongly advised. Failure to do so could result in confusion and eventually having to attend Court to get a declaration of parentage, among other possible issues. Having a child should be a joyous time for intended parents and surrogates alike, and ensuring to have all parties’ rights and obligations clearly set out in the beginning will make for the best experience as parents embark on their parenting journey.

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Secret Recordings by Parents in Family Law Cases

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In Canada, it is legal to record a party without their knowledge as long as one of the parties being recorded (which includes the person doing the recording) consents (Criminal Code s. 184(2)). However, simply because something is legal does not mean it will be admissible in court. This is especially so when it comes to secret recordings in family law cases.

A recent case in Ontario, Van Ruyven v Van Ruyven, 2021 ONSC 5963, dealt with two parties who put into evidence secret recordings they had taken of the other. The judge decided that the recordings could not be considered as evidence, and that such conduct was to be discouraged by the courts. This case has been cited by courts in BC, Alberta, and Saskatchewan, as well as Ontario, as judges caution family law litigants from engaging in the questionable activity of secretly recording one’s ex; or worse, one’s child.

Family proceedings can be extremely acrimonious. As such, some parents record the other parent or their child, in an often misguided attempt to collect evidence that the recording party thinks will amount to a “smoking gun”. However, this can often backfire and the recordings may cast doubt on the ability of the recording parent to put the needs of their child in front of their own desire to “win”. This was particularly so in K.M. v J.R., 2022 ONSC 111, where both parents secretly recorded each other, and the judge stated that parents need to be strongly discouraged from engaging in such behaviour.

The judge in that case, who had reviewed the recordings, stated in regards to the content of those recordings that

“[t]he adults were so busy arguing and screaming at each other that they didn’t seem to hear the boy say something that should have been obvious. “I’m scared.” (para 203(f)). The judge went on to say “the manner in which the recording was created raises serious questions about parental insight and sensitivity” (para 208 (e)).

In a similar situation, suspiciously obtained evidence was considered in a recent BC case: Steiner v Mazzotta, 2022 BCSC 827, where, in the context of the ongoing COVID-19 pandemic, a parent snuck onto the other parent’s property and took pictures of the parent who was with the child not wearing a mask in contravention of a previous order. The judge in Steiner admitted the picture as evidence, but stated: “Although the respondent’s poor conduct yielded evidentiary material that I could not properly exclude or ignore, such behaviour is not to be encouraged” (para 11(c)).

Note that whether or not secret recordings will be accepted by the court is up to the discretion of the judge, and that the creation and the attempted use of such recordings may backfire.

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The Effects of Bankruptcy on Family Law Orders

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Divorce is an emotionally and financially difficult process, leaving many people on the verge of insolvency. It is important for both parties to a divorce to know that while some types of debts are forgiven upon the completion of bankruptcy, many family law obligations are not. Spousal and child support obligations pursuant to a family court order are not dischargeable debts. In fact, a recipient spouse under a support order receives a preferential payout, placing them ahead of many other types of creditors in line to receive the same assets.

Costs awards in family law proceedings are categorized the same as the subject matter that the trial or application addressed, and each are treated differently in bankruptcy. A costs award following a trial dealing with support claims will be treated as a non-dischargeable debt, for instance, while a costs award following a parenting trial would be considered an unsecured claim in bankruptcy. Many trials do not deal with a single discrete issue, which risks making the categorization of a costs award on bankruptcy unclear. For this reason, it is important to consider whether the parties are at risk of insolvency at the time a cost order is made, so that costs can be apportioned per issue addressed at trial.

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Retroactive Spousal Support and Delay

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Entitlement for spousal support can be contractual, needs-based, or compensatory if one party was disadvantaged by the breakdown of the marriage. Once the court finds entitlement, they consider how long and how much should be paid for spousal support. An order for spousal support can be retroactive as well as ongoing.

In the past, some judges have declined to order retroactive spousal support or ordered a lower amount when there has been substantial delay in seeking spousal support. However, in a recent case, Legge v Legge, 2021 BCCA 365, the Court of Appeal has confirmed that where there is a clear entitlement to spousal support, a court should make a retroactive spousal support award that takes into account both the payor’s circumstances and the objectives of the spousal support, notwithstanding delay.

In this case, the parties separated after an 8-year relationship. The couple had met while the wife was pursuing post-secondary education, and decided to move to Alberta for the husband’s employment. The wife’s education was interrupted while both parties worked. They had a child together, and the wife became her primary caregiver and worked part-time. Following their separation, the wife initiated court proceedings for spousal support among other things, however, she never received a final or interim spousal support order.

Several years later, the husband commenced a divorce and property division action, and the wife counterclaimed for retroactive spousal support. At trial, the judge found that the wife had been disadvantaged by the marriage and also had a needs-based entitlement for spousal support, but that the 10 years since the parties had separated constituted undue delay. As a result, they declined to make a retroactive spousal support award.

On appeal, the court found that the trial judge had given insufficient weight to the wife’s needs and hardship, and thus the Order had failed to meet the spousal support objectives. The Court of Appeal was further persuaded by the recent Supreme Court of Canada Case Michel v. Graydon, 2020 SCC 24, which highlights the many obstacles to access to justice faced by family litigants, and requires courts to consider the reason for any delay in bringing proceedings. As a result, the Court of Appeal awarded the wife a lump sum retroactive spousal support award of $27,000.

Do you think you might have a case for a retroactive spousal support appeal?

Heath Law LLP is a full-service law firm serving Nanaimo and Vancouver Island that boasts high calibre, experienced legal counsel in divorce and family law. Review our Family Law page, meet our lawyers, or read more of our blog articles or contact us to book an appointment with one of our highly skilled lawyers.

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Limitation of Liability Clauses in Contracts

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6362222 Canada Inc. v. Prelco Inc., 2021 SCC 39: A Victory for Limited Liability Clauses

In general, limitation of liability clauses are valid in both Quebec’s Civil system and in the Common Law provinces. However, in Quebec limitation of liability clauses are tempered by articles in the Civil Code of Quebec prohibiting the exclusion of liability for intentional fault, bodily injury, and other public order issues. A recent Supreme Court of Canada case has strengthened the power of limited liability clauses and narrowed the applicability of the Breach of Fundamental Obligation Doctrine.

The case centered on a contractual dispute between 6362222 Canada Inc. (“Createch”), and their client, Prelco Inc. Createch is a consulting firm offering integrated management systems and performance improvement solutions. The parties entered into a contract which included a limited liability clause, stipulating that Createch’s liability to Prelco for damages for any cause whatsoever would be limited to amounts paid to Createch under the contract. A further stipulation was that Createch could not be held liable for any damages resulting from the loss of data, profits or revenue, from the use of products, for any other special, consequential, or indirect damages relating to services and/or material provided pursuant to the contract.

Two years into the contract, Prelco opted to terminate the relationship due to numerous problems with the system and Createch’s implementation. Prelco brought an action against Createch for $6,246,648.94 in damages for the reimbursement of an overpayment, costs for restoring the system, claims from customers, and loss of profits. The Superior Court found the limited liability clause to be unenforceable as it went to the essence of a fundamental obligation, and as such ordered a substantial judgment against Createch. The Court of Appeal dismissed the appeal.

The Supreme Court allowed the appeal, stating that the test for unenforceability due to the Doctrine of Breach of a Fundamental Obligation had not been satisfied. In order to find a clause inoperable on this basis, the validity of the clause has to either (a) be contrary to a public order limitation or (b) deprive a contractual obligation of its purpose. The SCC found that the clause did not run contrary to a public order limitation and that since Createch still owed significant obligations to Prelco the validity of the clause would not deprive the contract of its purpose to the extent required by the Doctrine. As such, the principle of freedom of contract supported the enforceability of the limited liability clause.

Takeaway: if you are contracting with a party that is insisting that there be clauses within the contract whereby they are excused from any liability, even for their own negligence, be aware that a Court will probably uphold the limitation of liability clause in the contract. In such a situation, you should consider the extent to which you can insure over the risks that flow from the contracting party’s negligence.

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