COMM 393 Chapter Notes - Chapter Case: Contra Proferentem
COMM 393 BKDK Holdings Ltd. v. 692831 B.C. Ltd. Case Briefs
[2010] B.C.J. No. 1948
2010 BCSC 1393
British Columbia Supreme Court
October 1, 2010
Facts
• On February 28, 2008, BKDK Holdings Ltd. (BKDK) and 692831 B.C. Ltd. (692831) entered into an
agreement for BKDK to purchase shares from 692831 in a company called Meridian Travel Ltd. (Meridian)
for $750,000 (three installments of $250,000 paid annually on April 30_
• The agreement contained a Clause 2 that stated that if Meridian was unable to successfully win [a] RFP
and retain [an important third part Tek opa’s] business, then the purchase price would be
reduced by $70,000.
• However, in reality Teck was not in an RFP process and had decided independently to move its business to
a competitor effective December 1, 2008. Meridia lost all of Tek’s usiess, eept for % of its forer
revenue.
• BKDK is petitioning that
o Clause 2 of the Agreement only comes into effect on the occurrence of precise events as set in
the clause, ael the loss of % of Tek’s usiess Meridian
o Since Teck was never engaged in an RFP process, the conditions in Clause 2 cannot be satisfied,
especially since Meridian was unable to win the non-existent RFP
• 6’s defee is that
o Clause 2 was designed to provide a mechanism for adjusting the purchase price in the event that
Teck’s aout as lost
Issues
• Did the parties intend that an unsuccessful bid in a RFP process was a condition that 692831 had to meet
to e etitled to Clause ’s application?
• Did the parties intend the reference to the RFP to only be descriptive of the manner in which Teck
intended to reassess its supplier and business?
Reasons
Law: Strata Plan No. 1086 v. Coulter, 2005 BCSC 146
• The court will only proceed with an application principally aimed at contesting a contract if there are no
seriously contested issues of fact
Law: Scanlon v. Castlepoint Development Corp. (1992), 99 D.L.R (4th) 153, [1992] O.J. No. 2692
• The court should consider the agreement as a whole and effect be given to all its provisions, and should
not interpret the agreement in a way that would refer one of its terms ineffective
• The court should interpret the contract in a way that would promote the true intent of the parties at the
time of entry into the contract
• If the court is unable to resolve a contradiction or ambiguity, the last resort will apply the concept of
contra proferentum, interpreting the contract against the author
Application
• The submission of either party could be reasonably interpreted as being the intent of the parties
• However, the proper construction of Clause 2 is that put forward by 692831, to deal with an uncertainty
that was a significant factor in the determination of the purchase price
o The interpretation put forward by BKDK would make Clause 2 entirely dependent on Teck using a
RFP process, which is inconsistent with commercial principles and business sense
o The process that Teck used to determine where to do business is not critical
• Meridia as uale to suessfull retai Tek’s usiess
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