Intellectual property (IP) contracts in Alberta are interpreted
just as any contract would be. The same basic rules of
interpretation apply, whether it is an IP assignment or transfer, a
software license, a complex techology asset acquisition, the
hiring of a technology employee or consultant, a
non-disclosure agreement or any commercial agreement with an
The Alberta Court of Appeal in Bhasin v. Hrynew, 2013
ABCA 98, has provided some helpful guidelines to assist with
basic contract interpretation. If you deal with contracts in your
job, then here are some tips to see how the courts will interpret
Think there is a duty to perform contractual obligations in
"good faith"? Guess again. "There is no duty
to perform most contracts in good faith." The court
cited an Ontario decision (Transamerica Life Canada v ING
Canada 2003 CanLII 9923 (ON CA) (para 51)) and two Alberta
Court of Appeal cases (Mesa Operating Partnership v Amoco
Canada Resources (1994) 149 AR 187 (CA) and Klewchuk v
Switzer, 2003 ABCA 187 (CanLII)). The courts in these
cases found no general duty of "good faith", and
they involved very different types of contract.
What about in employment agreements, where (arguably) there is
an imbalance of power in favour of the employer? The court
said there is a relatively narrow duty of good faith in
employment contracts: Employers must not announce or
implement termination in a "harsh or demeaning way". This
applies to the method of termination, not the reasons for the
termination. Other than that, there is no general duty of good
faith in employment contracts. The Court cited two cases which
state that employment contracts are not generally
contracts of good faith in all respects. (Wallace v United
Grain Growers 1997 CanLII 332 (SCC), and Keays v
Honda Canada, 2008 SCC 39 (CanLII).
More to come.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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