The appellant appealed a Small Claims Court judgment awarding the respondent contractor $10,000 following termination of a construction management contract during the pre-construction phase.
The appellant argued that he was not personally liable because he acted as an agent for the property owner and that the contractual termination payment constituted an unenforceable penalty clause.
The court held that the appellant signed the agreement as “owner” without written designation of agency and failed to prove he acted solely as an agent without personal liability.
The court further held that the termination payment was not unconscionable or extravagant and did not constitute an unenforceable penalty clause in light of modern jurisprudence favouring freedom of contract.
The appeal was dismissed.
