In a landmark decision, the Court confirms the scope of the surety bond indemnity agreement that our firm helped to draft in Gestion ITR inc. v. Intact Compagnie d'assurance..
Lavery’s reputation in construction bonding is well established. The firm has been a leader in this field for decades. Under the direction of our partner Nicolas Gagnon, Lavery supports the industry in contentious matters, while providing guidance on major policies.
Over 30 years ago, our firm was in charge of drafting the content of an indemnity agreement between a construction company and a major surety company. That agreement is still widely used in the industry today. The Court of Appeal of Québec recognized the scope of the agreement in a recent decision, confirming that the obligations of the signatories to the agreement included, in particular, the reimbursement of losses incurred by the surety, not only under surety bonds it had issued, but also under agreements entered into between the principal surety and another surety that had agreed to act as the construction company’s guarantor. This essentially means that the signatories to an indemnity agreement must reimburse the losses incurred by a surety that was obtained by the principal surety.
Our partner Nicolas Gagnon commented on this as follows: “So much effort went into drafting this indemnity agreement, given its significance for the industry. We’re obviously thrilled to see that Quebec’s highest Court agrees with our logic, and that it confirmed that the scope of the agreement we helped to draft applies to the situations we had identified.”
We would like to take this opportunity to acknowledge our industry colleagues’ skillful work in defending the indemnity agreement.