Canadian courts generally hold sophisticated commercial parties to an exclusive-remedies bargain — including one that excludes rescission — but a clause cannot shield a seller who committed fraud, whatever it says.
Short answer
Yes, for a negligent or innocent misrepresentation — Canadian courts generally hold sophisticated commercial parties to a clearly worded exclusive-remedies bargain, including one that excludes rescission — but no, an exclusive-remedy clause cannot validly shield a seller who knew the statement was false or was reckless as to whether it was true, because a party's own fraud is the standard example of when Canadian courts will refuse to enforce an exclusion clause even where its wording plainly covers the loss claimed.
No statute governs whether an exclusive-remedies clause can validly exclude rescission for a business sale representation — that boundary is set by the common law of exclusion clauses and of misrepresentation, applied to the seller's state of mind on the facts of each case. Two principles sit on a collision course. Canadian courts generally hold sophisticated commercial parties to their exclusive-remedies bargain, including a bargain that excludes rescission for an inaccurate representation. But in Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, the Supreme Court of Canada held that even a clause whose wording plainly covers the loss claimed can still be refused effect where enforcing it would be unconscionable or contrary to an overriding public policy — and a party's own fraud is the paradigm case, not a marginal one.
So the fight is rarely about what the clause says. It is about what the seller knew. Fraudulent misrepresentation is where the seller knew the statement was false, or was reckless as to whether it was true, as opposed to negligent misrepresentation, where the seller simply failed to take reasonable care. A clause that validly excludes rescission for the second cannot exclude it for the first — and many exclusive-remedy clauses carve out fraud expressly in any case, which Canadian law reaches the same way even without it.
Whether the exclusion covers negligent misrepresentation at all is a separate drafting question from the fraud carve-out. Proving which category a misstatement falls into becomes the entire dispute once the clause's own terms are otherwise clear.
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