Atos IT Solutions and Services GMBH et al. v.
Sapient Canada Inc.
[Indexed as: Atos IT Solutions and Services GMBH v. Sapient Canada Inc.]
2018 ONCA 374
Court of Appeal for Ontario, Simmons, D.M. Brown and Fairburn JJ.A.
April 18, 2018
Contracts — Damages — Limitation of liability — Exclusion clause in
contract limiting damages to “direct damages only” and providing “for
greater certainty” that neither party would be liable to other for “
indirect, special, consequential or punitive damages or for loss of profits” —
Trial judge reasonably interpreting that clause as only excluding damages for consequential or indirect lost profits and as not excluding lost
profits which directly resulted from party’s termination of contract.
Contracts — Damages — Minimum performance principle — Defendant entering into subcontract with plaintiff for provision by plaintiff of
data conversion and application management support services for project — Subcontract giving defendant right to terminate entire subcontract for cause and more limited right to terminate DC services part of
subcontract “for convenience” — Defendant relying only on “for cause”
provision when plaintiff sued it successfully for wrongful termination of
subcontract — Trial judge erring in finding that proper measure of
damages for termination of DC services portion of subcontract was balance owing — Minimum performance principle applying — Defendant
entitled to have damages for its termination of DC services portion of
subcontract calculated using less burdensome formula in termination
for convenience clause even through it terminated entire subcontract
and not just DC services portion of subcontract — Application of minimum performance principle not depending upon good faith conduct by
Contracts — Interpretation — Correctness standard not applying to
contractual interpretation when non-standard form contract uses
words found in other contracts — Termination clause in subcontract
providing that subcontractor was to “receive payment for the last milestone preceding the termination” — Trial judge reasonably interpreting
that provision as entitling terminated subcontractor to payment for last
milestone preceding termination even though subcontractor had
already received payment for that milestone.
The defendant was the successful bidder on a project to replace legacy customer
information software systems with a single new system. It entered into a subcontract with the plaintiff for the provision of data conversion (“DC”) services and
application management support (“AMS”) services. The subcontract entitled the
defendant to terminate the entire subcontract for cause by providing notice to the
plaintiff in certain circumstances. The defendant was also given a more limited
right to terminate the DC services part of the subcontract “for convenience”.
When the DC services part of the work was almost complete, the defendant terminated the subcontract. The plaintiff sued for damages. The defendant relied
solely on the termination for cause provision in the subcontract. The trial judge
found that the defendant had wrongly terminated the subcontract. He found that
the proper measure of damages for the termination of the DC services portion of