Piecemeal Solutions to Demonstrated Problems of Unfairness: Control of Price Terms in Common Law Canada

Abstract

This paper is a chapter contribution to an edited volume comparing various national approaches to the control of price terms in consumer and other standard form contracts. This chapter deals with Canadian federal law and that of the common law provinces (i.e. all provinces other than Quebec).

Common law Canada displays a marked disjunction between ex ante and ex post price control strategies. The federal government and provinces are avid price regulators, imposing explicit price controls and transparency mandates applicable to many consumer contracts. However, their legislative and regulatory strategy has been a piecemeal one, with most regulations applying to individual industry sectors, in particular those where popular pressure to crack down on deceptive practices or high prices generates political momentum. By contrast, the courts have assigned themselves a strictly limited role in regulating price terms ex post. They continue to hew to traditional notions of freedom of contract, and to invalidate price terms in exceedingly narrow circumstances derived from historically-recognized categories of unfairness—piecemeal solutions of a different kind. Neither the courts nor the legislatures have developed a general theory or policy of contractual unfairness, in standard contracts or otherwise. The overall effect is that ex ante regulation of price terms is stringent where it exists but uneven in application, while ex post control of price terms by the courts is widely available in principle but rarely if ever occurs in practice.

Keywords: comparative law, consumer protection, contractual unfairness, unconscionability, price control