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Court of Appeal’s view, the arbitration clause in that case was unconscionable
because of the improvidence of the bargain, combined with the
inequality of bargaining power between Uber and its drivers.
A third reason not to lament the change from Rosas is the potential for
the law of duress and unconscionability to be informed by recent developments
in contract law. For example, the Supreme Court of Canada has recognized
an overarching organizing principle of good faith in contract law.34
One actionable manifestation of that principle is the duty of contracting
parties to be honest about their performance. It is not unreasonable to
expect the law on the duty of honest performance to influence the analysis
(and the development) of duress and unconscionability as courts are forced
to grapple directly with the question of whether a party consented to a
change and exercised its autonomy.
This last point is more prognostication than legal argument, of course.
But the concept of good faith is becoming a near-regular argument in contractual
disputes. The Supreme Court of Canada confirmed that the list of
doctrines in which claims based on the organizing principle of good faith
will succeed is not closed. The growth of the concept outside these existing
doctrines is limited to situations where the existing law is found to be wanting
and the development may occur incrementally in a way that is consistent
with the structure of the common law of contract and gives due weight
to the importance of private ordering and certainty in commercial affairs.35
It is not beyond imagination that a court may find that a contractual change
was procured by something short of duress but nonetheless contrary to an
obligation of good faith in the course of amending an agreement.
Courts are rightly cautioned to make only incremental changes to the common
law. Significant changes can have unpredictable long-term consequences
as decisions build on one another. It is possible that the Court of
Appeal’s recent attempt to pare an oft-criticized branch of the common law
of contract may turn out to have unpleasant consequences, particularly for
vulnerable parties, contrary to my argument here. But as I have attempted
to explain, there are reasons to be hopeful that Rosas will have a positive
impact on contract law, enhancing the transparency and intelligibility of
rules of private ordering.
1. 2018 BCCA 191 Rosas.
2. Ibid at para 4.
3. One would rightly contend that the change brought
about by Rosas is not abrupt since, as the court
explains, the fresh consideration rule had its fair
share of judicial detractors in recent years. It had
been, for example, changed in similar ways by the
New Brunswick Court of Appeal in NAV Canada v