Penalty Clauses Through the Lens of Unconscionability Doctrine: Birch v. Union of Taxation Employees, Local 70030

Abstract

Canadian courts have shown an interest in abandoning the common law’s traditional rule against enforcing penalty clauses and instead analyzing those clauses through the lens of the doctrine of unconscionability. The Ontario Court of Appeal’s decision in Birch v. Union of Taxation Employees, Local 70030 adopts this approach. This short comment argues that in doing so the majority missed several opportunities to use unconscionability doctrine to examine features of the case that would have been ignored under the penalty doctrine.