Overlapping Remedies and the Unexpected Termination of Oil and Gas Leases

Abstract

The freehold oil and gas lease in Canada has had a perilous and uncertain existence. In the early cases, the courts applied a literal interpretation of the leases, resulting in numerous unexpectedly terminated leases. In recent years, there has been a resurgence of cases involving terminated leases. Modern case law recognizes that the failure of a lease can create liabilities in both tort and restitution, but courts have faced difficulties in dealing with the overlapping compensatory and restitutionary remedies. The modern case law has been heavily criticized, but the authors argue that there is a smaller difference between the overlapping remedies than is commonly supposed when the underlying purpose of restitutionary remedies is examined, and they propose a resolution to the problem of overlapping remedies.