BC Business Contracts: Why Precise Language Protects You When Deals Go Wrong

When a business deal goes sideways, it’s tempting to argue that “everyone understood” what was meant, or that past behaviour should count for something.  In British Columbia, where contract language is clear, that argument rarely succeeds.  Canadian courts, including BC courts, are generally consistent on one principle: if you signed it, the words in the agreement govern.

The Supreme Court of Canada Set the Standard

The modern framework for interpreting commercial contracts in Canada was established by the Supreme Court of Canada in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53.

The Court confirmed that the starting point for any interpretation is always the contract’s own language.  Surrounding circumstances, i.e. objective background facts known to both parties at the time of contracting, can provide helpful context, but they can never override the written words.

Sattva is binding authority across Canada, including in British Columbia, and BC courts apply it regularly.

What Happens When a Deadline Is Missed – Even by 35 Minutes

A stark illustration of this principle comes from a recent Ontario Court of Appeal decision that reflects the same approach BC courts take.  In 3 Gill Homes Inc. v. 5009796 Ontario Inc., 2024 ONCA 6, a purchaser in a commercial real estate transaction missed the 3:00 p.m. closing deadline by just 35 minutes.

The agreement contained a standard “time is of the essence” clause – language that appears in countless BC purchase and sale agreements, commercial leases, and business contracts.  That clause stipulated that all deadlines were to be strictly enforced unless modified in writing.

Despite the minor delay, the vendor terminated the agreement and returned the funds.  The purchaser argued that the vendor’s own past flexibility with deadlines should count against strict enforcement.  The court disagreed and its reasoning matters for every BC business owner.

Three Arguments That Failed and Why

1. “The other side missed deadlines too.”

The purchaser pointed to a history of both parties treating deadlines loosely.  The court rejected this, holding that past conduct cannot be used to alter the plain meaning of a “time is of the essence” clause.  Once the parties formally amended the agreement and confirmed a firm deadline in writing, prior flexibility became legally irrelevant.

2. “The contract should be rewritten to reflect what we really meant.”

The Court of Appeal firmly rejected any suggestion that a court could step in and redraft the parties’ bargain.  Where sophisticated commercial parties enter an agreement, that bargain must be respected.

3. “Enforcing this strictly is unconscionable.”

The purchaser argued that equity, the court’s discretion to soften a harsh result, should apply.  The court held there was no basis for this.  The parties were experienced commercial actors with a prior dealing history, and the vendor had been transparent throughout about its intention to enforce the deadline strictly.

What This Means for BC Businesses 

British Columbia’s contract law framework mirrors these principles directly.  BC courts apply Sattva and give effect to the plain language of commercial agreements.  Whether you are dealing with a commercial lease, a shareholders’ agreement, an asset purchase agreement, or a service contract, the words your lawyer drafts, or that you sign, are what a court will enforce.

A few BC-specific considerations worth noting:

• Employment contracts:  BC’s Employment Standards Act, RSBC 1996, c. 113, sets minimum floors that contract language cannot displace but above those minimums, carefully drafted language governs the relationship.

• Commercial tenancies:  The Commercial Tenancy Act, RSBC 1996, c. 57, operates alongside contract terms; precise lease language on notice periods, renewal rights, and default remedies is critical.

• Business sale agreements:  Under BC’s Business Corporations Act, SBC 2002, c. 57, certain corporate approvals are required but once a valid agreement is in place, courts enforce it as written.

  
  

Practical Takeaways for Vancouver Business Owners and Employers

The 3 Gill Homes decision, grounded in the Supreme Court’s Sattva framework, sends a clear message to BC businesses:

• Draft precisely:  Every clause should reflect exactly what you intend.  Ambiguous language creates disputes; clear language closes them.

• Amend in writing:  If circumstances change and you agree to a variation, document it.  Verbal agreements and informal emails may not be enough to override a written contract term, especially a “time is of the essence” clause.

• Don’t assume past flexibility creates a new norm:  Allowing a deadline to slide once does not mean you have permanently waived your right to enforce it, but a formal written amendment confirming a firm new deadline eliminates doubt.

• Know what you’re signing:  Standard-form clauses like “time is of the essence” carry real legal consequences.  Treat them seriously before signing, not after a deal falls through.

Contract disputes are expensive, disruptive, and often avoidable.  Whether you are entering a commercial transaction, negotiating a business acquisition, or reviewing an employment agreement, having legal counsel review your documents before you sign is far less costly than litigation after a deal collapses. 

Derpak White Spencer LLP works with Vancouver and BC businesses to draft, review, and negotiate commercial agreements that say what they mean and mean what they say.

Contact: Alex Robertson | (604) 736-9791 | ar@dwslaw.ca 

Disclaimer: This article is not intended to serve as, or should be construed as legal advice, and is only to provide general information. For advice about your specific situation, please contact us. The information for this article was compiled on April 27, 2026