The question of whether contributory fault or negligence applies to contract law remains uncertain, as courts in Canada have used these terms interchangeably and inconsistently. The case of Arcamm Electrical Services Ltd. v. Avison Young Real Estate Management Services LP, 2024 ONCA 925 (“Arcamm”) adds to this complexity. While the Court of Appeal for Ontario explicitly recognized contributory fault as a valid defence to a breach of contract claim, the decision reflects ongoing ambiguities in the treatment of fault-based apportionment in contract law. Although the court did not determine whether the distinction between fault and negligence is substantive or merely semantic – thus leaving open questions about the proper legal framework for apportioning damages in contract cases – it confirmed that contributory fault or contributory negligence may be a valid defence to breach of contract claims.
Background
This case arose from a dispute over unpaid invoices for electrical services provided by Arcamm Electrical Services Ltd. (“Arcamm”) to a commercial property owned by 4342 Queen St. Niagara Holdings Inc. (“Queen”). The property experienced a power outage in 2021, and Arcamm was contracted to restore the power. Although Arcamm did so, Queen alleged that Arcamm also stored the original transformers improperly in the electrical room, exposing them to high humidity and dust. The transformers were rendered useless, and Arcamm had to install replacement transformers. Queen only paid for the initial services and refused to pay for the replacement transformers and installation, alleging that Arcamm’s negligent storage damaged the original transformers.