What did the Supreme Court of Canada rule regarding the doctrine of privity?

The ruling by the Supreme Court of Canada regarding the doctrine of privity indicates that the Court recognized the need for this legal principle to evolve in response to modern commercial realities. The doctrine of privity traditionally states that only parties to a contract can be bound by it or benefit from it. However, as commercial practices and relationships have become more complex, the strict application of privity has been seen as potentially problematic.

By allowing the doctrine to evolve, the Supreme Court acknowledged that it is important to adapt the law to better serve justice and reflect the current dynamics of contractual relationships. This evolution can facilitate fairness and practicality, especially in scenarios where third parties may be significantly affected by contractual agreements even though they are not direct participants in those agreements.

The Court's decision underscores the importance of flexibility in contract law, enabling it to address the realities of modern commerce where stakeholders beyond the immediate parties to a contract often have legitimate interests in its terms and outcomes.