In this all too familiar scenario, an immigrant trucker leased a tractor for the purpose of hauling exclusively for one company. The trucker thought his tractor was fully insured under the insurance policies carried by the company, and that there was no need for him to buy additional insurance for his tractor.
The contract stipulated that the trucker’s tractor would be listed as a vehicle under the insurance policies carried by the company, however, when read carefully, the contract was actually silent on what that insurance coverage was, and it stipulated that it was up to the individual truckers to review the insurance coverage provided under the company’s policies, and to decide for themselves whether any supplemental insurance coverage was desired or required (in which case the independent trucker would have to purchase it themselves). The Plaintiff owner/operator trucker didn’t understand things this way: he thought he was fully covered, based in part on how he thought all companies operated, and through quant assurances from some staff that he was fully covered.
The problem, however, was the company did not carry comprehensive coverage, so when the plaintiff’s tractor erupted in flames while parked, the loss was uninsured. The trucker sued the company for allegedly breaching their contractual obligation to fully insure his tractor.
The court concluded that the contract never obligated the company to full insure the plaintiff’s tractor. The plaintiff trucker made several pleas to have the court interpret the contract otherwise, including:
- unconscionability: the plaintiff argued that the company was a large sophisticated corporation while the plaintiff trucker was a sole shareholder who spoke English as a second language, who was dependent on the company since he drove exclusively for it, he was not permitted to negotiate the terms of the contract, and the company never shared their insurance documents with him or intimate where common insurance coverage may not have been purchased by the company. The court rejected the argument, concluding that the two part test for unconscionability could not be met. In this regard, the court concluded that: (i) there was no proof on inequality of bargaining power since the Plaintiff was fully capable of asking for and reviewing insurance contracts, and buying additional coverage, before signing the contract, and (ii) there was no proof that the contract entered into was improvident or an unfair transaction since there was no evidence that the company benefited or was unfairly enriched by the insurance coverage provisions set out in the contract or that the Plaintiff was unduly disadvantaged by those terms;
- Contra Proferentum: the plaintiff argued that there were ambiguous and conflicting provisions in the contract drafted by the company requiring the court to interpret the contract in his favour according to the contra proferentum doctrine. The court rejected this argument on the grounds that there was no ambiguity or conflicts in the wording of the contract;
- Exclusionary Clauses (Need to be Highlighted): the plaintiff argued that the exclusionary clause found in the contract ought to have been specifically brought to the plaintiff trucker’s attention by the company through bold and highlighted text. This principle is often applied in waiver of liability exclusion terms found in rental contracts or event-entry contracts, and more so when there is little-to-no chance for contracts to be re-written or negotiated. The court considered this principle to be inapplicable in the instant case – the contract could be negotiated, and the clause (advising the plaintiff that the company was not guaranteeing the adequacy of insurance coverage being provided and that the plaintiff trucker was responsible for ensuring that the insurance in place was appropriate for his needs) was sufficiently obvious on the face of the document (ie: it was in plain wording, and not hidden in some footnote or small print on the back of a document);
- Misrepresentation (about being fully insured). The plaintiff trucker argued that he was assured by some staff that his truck was fully insured, and that he relied on that misrepresentation to his detriment. The court dismissed this argument on the basis that the plaintiff failed to call the employees who purportedly said those words to him, and perhaps more importantly, even if those words were said, they were said after the contract was signed. In other words, those words did not induce him to sign the contract. Finally, the court was not prepared to conclude that the words misrepresented anything because being fully insured could mean fully insured to operate on the highways (ie: the required third-party liability insurance).
Jakab et al. v. Clean Harbors Canada Inc., 2022 ONSC 3277
https://www.canlii.org/en/on/onsc/doc/2022/2022onsc3277/2022onsc3277.html