CORPORATE COMMERCIAL LAWOVERVIEW
Corporate commercial law, or "business law," is a broad area which can mean different things to different people. For many, the term is an umbrella which encompasses a number of specialties, such as corporate finance, securities, and bankruptcy and insolvency.
Counsel practising corporate commercial law may be involved in any number of matters for clients, including:
- drafting and negotiation of contracts of all types, including licensing and distribution agreements, supply agreements, joint ventures and strategic alliances;
- corporate governance;
- contractual disputes, typically pre-litigation;
- corporate reorganizations and restructurings; and
- mergers & acquisitions (assets or shares; public or private).
Corporate commercial lawyers need not only good technical skills, but a working knowledge of business, an ability to establish a rapport with the client, and a practical approach.RECENT DEVELOPMENTS
While corporate commercial is a very broad practice area, several developments during the year are worthy of special attention.A. National Regulator
In 2009, the federal government signaled its intent to move ahead with the establishment of a national securities regulator by establishing the Canadian Securities Transition Office (CSTO). Subsequently, the CSTO delivered the proposed Canadian Securities Act. The federal government referred the proposed Act to the Supreme Court of Canada for its opinion as to the constitutionality of the draft legislation.
The provincial governments of both Alberta and Québec, however, referred the matter to their own Appeal Courts. In March 2011, the Alberta Court of Appeal ruled against the federal scheme, saying the legislation was unconstitutional. The court urged the federal government to negotiate a new regulatory regime with the provinces. For its part, the Supreme Court heard the case in April 2011 and at press time, the court's judgment was still reserved.B. Supreme Court on Procurement Contracts
In Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), the Province of British Columbia issued an RFP for the construction of a highway. Only those companies which had responded to an earlier request for expression of interest were eligible to submit a proposal. Despite this restriction, one bidder submitted a proposal through a joint venture involving an ineligible party. When BC selected that bid over Tercon's bid, the company elected to sue.
In its analysis of Tercon, the Supreme Court indicated that, when a plaintiff seeks to escape the effect of an exclusion clause, it must be determined: a) whether, as a matter of interpretation, the exclusion clause even applies to the circumstances; b) if the exclusion clause applies, whether the clause was unconscionable and thus invalid at the time the contract was made; and c) if valid and applicable, whether the court should nevertheless refuse to enforce the exclusion clause because of an overriding public policy. While the Court agreed on this framework, it split (on a 5:4 basis) as to whether the exclusion clause applied in the circumstances.
While intended to bring greater clarity to procurement contracts, the fact that the Court was divided on the initial factual determination suggests there remains considerable uncertainty as to the application of broad exclusion clauses in tender documents.