Supreme Court of Canada to rule on the enforceability of arbitration clauses

Back in January, an Ontario court ruled that Uber's arbitration clause couldn't keep its drivers from suing it; Uber has appealed to the Supreme Court of Canada, which has taken up the case and will hear arguments about whether arbitration clauses (through which the parties surrender the right to sue in court) are enforceable in "adhesion contracts" (contracts that are not negotiated, where one party has much less power than the other, such as in click-through agreements).

The Supreme Court's ruling will have far-reaching implications, as mandatory arbitration is a common feature in adhesion contracts, and these contracts have become ubiquitous.

The hearing of this matter will provide the Supreme Court with an opportunity to determine the breadth of application of its holdings in Douez. Additionally, the Supreme Court may choose to revisit the competing, though arguably consistent, tests for unconscionability from Titus v. William F. Cooke Enterprises Inc.[6] and Morrison v. Coast Finance Ltd.[7] Hopefully, this decision will bring much-needed clarity to all parties seeking to contract on the basis of alternative dispute resolution mechanisms, such as arbitration clauses.

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