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Expanding the duty of good faith

Thursday, January 29, 2015 @ 7:00 PM | By Eli Lederman

The Supreme Court of Canada’s landmark decision in Bhasin v. Hrynew [2014] S.C.J. No. 71, makes it clear that there is now a common law duty to act honestly in the performance of all contractual obligations. Previously, duties of good faith had been recognized in particular types of contracts (for example, in employment, insurance and franchise agreements), with respect to particular types of contractual provisions (as in contractual clauses which provide for the exercise of discretionary powers) and in particular types of contractual relationships.

The court...