THE ADVOCATE 185
VOL. 77 PART 2 MARCH 2019
and agreements face similar realities: circumstances change and contractual
modifications may be desirable and beneficial to both parties.
182 As the Court in Antons Trawling Company Ltd. v. Smith, 2002
NZCA 331 said, “the importance of consideration is as a valuable signal
that the parties intend to be bound by their agreement, rather than an
end in itself” (at para. 93).
183 In my view, that is the case before this Court. When parties to a
contract agree to vary its terms, the variation should be enforceable without
fresh consideration, absent duress, unconscionability, or other public
policy concerns, which would render an otherwise valid term unenforceable.
A variation supported by valid consideration may continue to be
enforceable for that reason, but a lack of fresh consideration will no
longer be determinative.
Freed from the shackles of the fresh consideration rule, the Court of
Appeal enforced the amendments to the loan agreement, meaning that the
claim was not time-barred since the time for performance was extended.
Ms. Rosas was entitled to judgment in the amount of the loan.14
DON’T BE AFRAID OF ROSAS: FRESH CONSIDERATION WAS A FICKLE FRIEND
Some may question whether Rosas is a positive step in the law.15 From the
perspective of an employee or some other contracting party in a weak bargaining
position, the law of fresh consideration was an often effective
answer to the enforcement of any modification of an existing agreement to
the detriment of the weaker party. Courts in Ontario and British Columbia
considered the requirement of fresh consideration for a contractual change
to be a tool to level the playing field between strong and weak. The Ontario
Court of Appeal, for example, made note of the importance of fresh consideration
in the employment context:
42 The requirement of consideration to support an amended agreement
is especially important in the employment context where, generally,
there is inequality in bargaining power between employees and
employers. Some employees may enjoy a measure of bargaining power
when negotiating the terms of prospective employment, but once they
have been hired and are dependent on the remuneration of the new job,
they become more vulnerable. The law recognizes this vulnerability, and
the courts should be careful to apply Maguire v. Northland Drug Co.,
1935 S.C.R. 412 and Techform Products v. Wolda (2001), 56 O.R. (3d) 1
(C.A.), leave to appeal refused 2002 3 S.C.R. xii only when, on the facts
of the case, the employee gains increased security of employment, or
other consideration, for agreeing to the new terms of employment.16
It was, according to the Ontario Court of Appeal in a more recent case, a
matter of “fairness”.17 The B.C. Supreme Court echoed this normative assessment
of the fairness of the bargain through the prism of fresh consideration.
To have an enforceable modification, some additional benefit must flow to
the employee on signing a new agreement: