Report No. 199

Canada (procedural unfairness):

Ontario Law Commission was of the view that the distinction between procedural and substantive unfairness is too rigid and can lead to a sterile debate. We do not agree. We have referred to our reasons in Chapter VII as to why such a division has to be made.

Ontario Business Practices Act, 1990 applies to consumer contracts and refers to 'unconscionability' as including procedural matters such as infirmity, ignorance, illiteracy and inability to understand the language of the agreement.

In the Report of the British Columbia Law Institute (2005) titled 'Unfair Contract Terms: An Interim Report', there is elaborate discussion in Chapter II of specific cases dealing with unfair contracts - such as automatic renewals, acceleration clauses, terms excluding or limiting liability; in Chapter III to the currently available tools in British Columbia to deal with Unfair Contract Terms and in Chapter IV to Options for Reform.

There is a very useful discussion on the procedural and substantive divide in the terms of contracts in several countries. As the Report is an Interim Report, there are no final conclusions. We have referred to this Report in Chapter VII.