Why Silence In A Contract Can Be More Dangerous Than A Bad Clause
April 22, 2026
BY: IAN ANDREW LAW
Businesses usually worry about obviously bad clauses. They mark up the non-compete, the indemnity, the cap, or the termination right. What often gets less attention is the issue the contract does not address at all.
That silence is often where the real litigation risk sits. A bad clause at least gives the parties a defined term to interpret. Silence invites fights about default rules, implied terms, the proper use of surrounding circumstances, and what the parties say the agreement must have meant.
Key Takeaways
• Silence often creates uncertainty, not flexibility.
• Unaddressed issues invite fights about default rules and implied obligations.
• Good faith and discretion can become more important when the contract is thin.
• Silence is especially risky in termination, notice, liability, and M&A risk allocation.
• Express drafting is usually cheaper than later litigation over gaps.
Why Silence Causes Trouble
A contract can be silent in several ways. It may say nothing about termination mechanics. It may omit a clear notice process. It may leave a pricing adjustment undefined. It may not address whether a limitation clause applies to performance misconduct. In M&A work, it may say nothing about sandbagging. In preliminary agreements, it may fail to identify what is binding and what is not.
Each of those silences creates room for competing narratives. Once a dispute starts, that room becomes expensive.
What Courts Do With Contractual Gaps
Ontario courts do not fill every gap generously. They begin with the text that exists, consider the agreement as a whole, and may in limited circumstances imply terms or apply background doctrines such as good faith, honest performance, and reasonable exercise of contractual discretion. But that process is not mechanical. It depends on the nature of the bargain and the evidence available.
The result is often uncertainty rather than rescue. That is particularly true where the disputed issue sits close to risk allocation or to a power one side expected to retain.
Why Some Silences Are Riskier Than Others
Certain omissions are repeat offenders. Termination language that does not explain cause, cure, or notice creates avoidable fights. Limitation language that does not speak clearly to categories of loss can create unexpected exposure. An LOI that is unclear about its binding provisions can create avoidable arguments during failed negotiations. In M&A agreements, silence on sandbagging can leave the parties litigating a question that would have been much cheaper to answer in a single sentence.
The legal lesson is simple even if the drafting exercise is not: uncertainty migrates downstream.
The Business Implication
A bad clause can often be identified, priced, and negotiated. Silence is harder because it tends to stay hidden until the relationship is stressed. By then, the gap is no longer theoretical. It is part of the dispute.
In commercial drafting, clarity does not only mean improving weak clauses. It also means identifying the issues the contract leaves unsaid and deciding whether silence is truly acceptable.
Sources
• Bhasin v. Hrynew, 2014 SCC 71.
• C.M. Callow Inc. v. Zollinger, 2020 SCC 45.
• Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7.
• Dr. Michael Emon Dentistry Professional Corporation v. Alexander Sevo Dentistry Professional Corporation et al., 2025 ONSC 4961.
This article is for general information purposes only and does not constitute legal advice. Reading this article does not create a solicitor-client relationship. If you require advice specific to your situation, contact my office.