Good Faith in Performance of Contracts

The law of contract has not really changed very much since I went to law school over 30 years ago. In commercial or business dealings, everyone has generally been able to protect their own interests only. However, recently the Supreme Court of Canada released a decision, Bhasin vs. Hrynew 2014 SCC 71, that there is duty on a party to all contracts to act honestly in the performance of contracts. Parties to a contract generally must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily. A party should have appropriate regard to the legitimate contractual interest of the contracting party and requires them not to seek to undermine those interests in bad faith. The exact scope of this duty will need to be determined on a case by case basis. For more information, read my full article.