The Doctrine of Public Policy in Canadian Contract Law

42 / Annual Review of Civil Litigation
contracts injurious to the state since at least 1799.22" Plainly, therefore, all of
these categories, each of which is still alive today, are inextricably bound to the
very idea of public policy. To acknowledge this is not to side with the positivist
and claim that the various heads are immutable, but it is to note that the historical
limitation of the doctrine to these specific categories is quite incomprehensible
when witnessed from within the arbitrary model of public policy native to the
consensus and interstitial legislator theories canvassed above.
It is instructive in this respect to return to Waddams, who explains the
categories on the basis that "this miscellaneous collection amounts to a series
of instances in which the courts have weighed public policy against freedom of
contract and preferred the former."22' Such a statement is of course partly
accurate, for each of the categories has indeed somehow been taken to reflect a
value more fundamental than the freedom to contract. Yet it is, in fact, possible
to conceive of many different "fundamental values" such as the protection of
the environment, the need for education, the advancement of science, the promotion
of the arts, the desire for affordable food, housing and medicine, etc.,
that have never been crystallized into a category of public policy, and yet which,
according to either the social consensus or the interstitial legislator, may be
more important than the freedom to contract — indeed, perhaps even more
important than those values which have been elevated into a category. It is
therefore legitimate to question whether there exists some feature of each category
that imbues it with a degree of common importance.
Perhaps the most compelling explanation of this feature of the public
policy categories is offered by the New Zealand commentator Sacha Judd.
According to Judd's view:
[slociety is. . founded on the balancing that takes place at a macro level between.
. . different institutions, allowing for individualism at a micro level.. .
Contracts that restrain future freedom endanger the necessary autonomy of individuals
within the market. Contracts to commit a legal wrong represent an affront
to the system of legal sanctions, which is vital to the maintenance of a social order
necessary to the enjoyment of individual rights. Similarly, contracts that oust the
jurisdiction of the courts are attempting to circumvent the judicial process. If we
turn to the categories of contract that offend public policy, we can see how many
of them threaten this ideological base, through representing direct conflict at a
macro level between the law of contract and a competing social institution. . The
only way the legal system has legitimacy within the liberal state is if all individuals
are subject to the rule of law, and therefore parties must be able to turn to the
courts for relief . . These agreements represent the potential to undermine ideas
that form the foundation of the social structure in the liberal state. Enforcement
of such agreements eventually becomes self-defeating, or potentially destructive
of the competing institutions. Critical to this theory is understanding the nature
220 The Hoop (1799), 1 C. Rob. 196.
221 Waddanis, supra note 4 at 404.