Law360 Canada (May 31, 2024, 12:01 PM EDT) -- Appeal by Earthco Soil Mixtures Inc. (Earthco) from a judgment of the Ontario Court of Appeal which overturned a judgment dismissing Pine Valley Enteprises Inc.’s (Pine Valley) action for damages. Pine Valley bought topsoil from Earthco for use in a project for the city of Toronto (City). The contract between the parties provided that Pine Valley had the right to test and approve the topsoil at its own expense at Earthco’s facility before it shipped. It further provided that if Pine Valley waived its right to do so, Earthco would not be responsible for the quality of the material. The topsoil delivered by Earthco did not meet the City’s specifications. The topsoil had to be removed and replaced, incurring costs for Pine Valley. Pine Valley claimed that the purchased topsoil involved a sale by description and sought damages from Earthco. Earthco cited the exclusionary clauses. The trial judge dismissed the action based on the exclusionary clauses. He held that Earthco had successfully excluded liability for failing to supply topsoil that corresponded with the description in the contract, since Pine Valley had failed to do its own test before taking delivery. The Court of Appeal allowed the appeal. The exclusionary clauses did not constitute an express agreement to exclude the s. 14 of the Sale of Goods Act (SGA) condition as they failed the test of explicit, clear and direct language. Earthco was ordered to pay damages to Pine Valley. Pine Valley argued that the Court of Appeal was correct to require explicit, clear and direct language and to conclude that the exclusionary clauses did not exclude liability for “conditions” and the “identity” of the soil. Earthco argued that this approach to the interpretation of an express exclusion clause was rigid, narrow, legalistic and technical to the point of requiring “magic words” to yield particular legal results....