Is a bonus incentive clause in a contract enforceable?

Alberta, Canada


The following excerpt is from Eyben v. K. R. Ranches (1970) Ltd., 1978 CanLII 798 (AB QB):

Albeit the parties at the outset of the contract were in mutual ignorance of the means to be employed in the calculation of profit, it does not follow that the court cannot ascribe to the term its natural and ordinary meaning in the resolution of this dispute: Whyte v. McTaggart (1915), 1915 CanLII 427 (MB QB), 31 W.L.R. 654, 22 D.L.R. 8 (Man.). Contracts including bonus incentives have long been utilized in master-servant and principal-agent relationships, and in my view the court should strive to preserve and enforce contracts such as these and avoid wherever possible a judicial dismantling of them if the term is ascertainable.

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