British Columbia Law
What Is a Contract Dispute in BC — and What Can You Do About It?
Contract disputes are the most frequent legal issue facing BC businesses — and one of the most stressful. Whether a client hasn't paid, a supplier hasn't delivered, or a business partner has walked away from their obligations, understanding your legal position and your options is the first step toward a resolution.
What Is a Contract?
A contract is a legally enforceable agreement between two or more parties. In BC, a contract can be written, verbal, or implied by conduct — though written contracts are far easier to enforce because they provide clear evidence of what was agreed.
For a contract to be legally binding, it requires:
- Offer — one party proposes specific terms
- Acceptance — the other party accepts those exact terms
- Consideration — something of value flows from each party (money, goods, services, a promise)
- Intention — both parties intend to create a legal relationship
What Is a Breach of Contract?
A breach occurs when one party fails to perform their contractual obligations without a lawful excuse. Common examples in BC:
- A client refuses to pay an invoice
- A contractor abandons a project without completing the work
- A supplier delivers defective goods
- An employee violates a non-compete clause
- A business partner diverts business opportunities in violation of their partnership agreement
Breach can be material (so serious that it goes to the heart of the contract and justifies the other party treating the contract as ended) or minor (a technical breach that entitles the other party to damages but not to terminate).
Your Options When Faced with a Contract Dispute in BC
1. Direct negotiation
Most contract disputes are resolved through negotiation — often a letter from a lawyer is enough to prompt payment or performance. This is the fastest and least expensive path.
2. Mediation
A neutral mediator helps both parties reach a mutually acceptable resolution. Mediation is private, relatively fast, and far less expensive than litigation. Many commercial contracts now include mandatory mediation clauses before either party can sue.
3. Arbitration
If the contract includes an arbitration clause, disputes must go to arbitration rather than court. An arbitrator hears the evidence and issues a binding decision. Arbitration is typically faster and more private than court, but less flexible than mediation.
4. BC Civil Resolution Tribunal (CRT)
For disputes involving $5,000 or less (and some strata and motor vehicle matters up to higher amounts), the CRT is an accessible online tribunal that handles small claims without requiring a lawyer. Since 2024, the CRT also has jurisdiction over complaints about the non-consensual posting of intimate images online under BC's *Intimate Images Protection Act*.
5. BC Provincial Court (Small Claims)
For claims up to $35,000, BC Provincial Court's small claims division is accessible without a lawyer, relatively fast, and less expensive than Supreme Court proceedings.
6. BC Supreme Court
For claims over $35,000, or complex matters involving injunctions or specific performance, the BC Supreme Court is the appropriate forum. Litigation at this level involves formal pleadings, discovery, and usually legal representation on both sides.
Limitation Periods — Don't Wait Too Long
In BC, the *Limitation Act* sets a two-year limitation period for most contract claims — running from when you discovered (or should have discovered) the breach. If you miss the limitation period, you lose the right to sue regardless of how strong your case is. If you think you have a claim, get legal advice promptly.
How to Protect Yourself with a Strong Contract
The best contract dispute is one that never happens. Key contract protections:
- Clear payment terms (amount, due date, late payment consequences)
- Precise scope of work — what is and is not included
- A dispute resolution clause — specifying mediation, arbitration, or choice of court
- Limitation of liability provisions
- Termination rights and consequences
- A governing law clause (specifying BC law applies)
A lawyer-reviewed contract costs a fraction of what a dispute costs — and often prevents the dispute entirely by removing the ambiguity that disputes feed on.
This article is general information, not legal or tax advice. Meetings are by appointment only, by phone or secure video.