The appellant, Pine Valley Enterprises Inc., appealed a trial decision that dismissed its action against Earthco Soil Mixtures Inc. for breach of contract.
Pine Valley had purchased topsoil from Earthco for a City of Toronto project, but the soil did not meet specifications, requiring costly removal and replacement.
The trial judge found that Earthco breached the implied condition under s. 14 of the Sale of Goods Act (SGA) that goods correspond to their description, but dismissed the action based on exclusionary clauses in the contract.
The Court of Appeal allowed the appeal, holding that the exclusionary clauses, which disclaimed responsibility only for the "quality" of the material, were not explicit, clear, and direct enough to exclude liability for a breach of the s. 14 implied condition, which relates to the "identity" of the goods, not merely their quality.
The court emphasized that the factual matrix cannot be used to expand the meaning of such clauses beyond their express wording.