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  • Sea to Sky Law

CONTRACT BREACH, RESTITUTION

Updated: Jul 12, 2023


CONTRACT BREACH, RESTITUTION
CONTRACT BREACH, RESTITUTION

The Canadian Press reported a case about a sex worker being "stiffed" (pun intended) by her customer who received the services but failed to pay the agreed fee. The customer was sued in Nova Scotia Small Claims Court 2023 NSSM 27 for his breach of contract but the customer argued that the contract was not enforceable because it was illegal to buy sex.


This case provides an excellent summary of the law about the enforceability of illegal contracts, and states at para 44: "Whether in contract or tort, failure of the courts to provide a remedy for a wrong or a breach of a duty owed by a client would contribute to the very exploitation the legislation was designed to prevent."


In addition to the limited availability to avoid complying with a contract due to illegality, this case also reminds us that in addition to contract law, a Claimant has tort law to seek a remedy. Our British Columbia Court of Appeal in Kim v. Choi, 2020 BCCA 98 analyzes the application of unjust enrichment in the context of an illegal contract. "The Court found a claim for restitution based on unjust enrichment, that derives from an illegal contract, will not be barred by illegality unless the restitution will defeat or frustrate policy underlying the illegality."


This Small Claims Court held that the customer was unjustly enriched by not paying for the services and the Claimant was deprived of the time she could have used for other customers and thus ordered restitution.



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