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New Good-Faith Duty of Honesty in contractual Performance

April 2015

There is more to contracts in Canada than the words on the page. With its very recent decision in Bhasin v Hrynew (2014 SCC 71), the Supreme Court of Canada has reshaped the way that Canadian courts will look at contractual performance. In a unanimous decision, the Court: (1) recognized good faith contractual performance as a "general organizing principle of the common law of contract"; and (2) recognized a new duty of "honest performance", which requires the parties to be honest with each other in relation to the performance of their contractual obligations. The decision has broad implications, and raises several issues that will likely be the subject of further litigation. Published in the Canadian section of Best of the Best 2015.

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