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Feb 18, 2021 · The trial judge found that Baycrest breached the duty of good faith by keeping Callow in the dark about its intention to terminate. Damages were awarded to Callow.
- Background
- The Lower Court Decisions
- The Supreme Court of Canada Decision
- Conclusion
In Callow, a company, Baycrest, and its designated property manager managed the joint and shared assets of ten condominium corporations. In 2012, Baycrest renewed a winter maintenance services agreement with C.M. Callow Inc. and entered into a new summer contract as well. The winter contract had a two-year term, though it allowed Baycrest to unilat...
At trial, the Court held that Baycrest had breached the duty of honesty in contractual performance. The Court awarded damages, including a sum that represented the profit Callow would have received during the remaining term of the winter contract. The Ontario Court of Appeal reversed the trial decision. While acknowledging that Baycrest's conduct m...
A five-member majority allowed the appeal. The majority held that when a party to a contract is aware its conduct or representations have created a misapprehension in the counterparty's mind in relation to the performance of an obligation or the exercise of a right under a contract, the duty of honesty requires that party to correct it. The determi...
The Supreme Court of Canada's decision confirms that the duty of honesty applies to the performance of obligations and the exercise of rights under a contract. Where a party knows that its conduct or representations have led a counterparty to hold a false impression in connection with the contract, the duty of honesty requires that party to correct...
Dec 21, 2020 · On December 18, 2020, the Supreme Court of Canada gave judgment in C.M. Callow Inc. v. Zollinger. [1] The decision offers important guidance about how parties to contracts must conduct themselves in good faith when carrying out or terminating a contract. What You Need to Know.
When Baycrest exercised the termination clause dishonestly, it breached the duty of honesty on a matter directly linked to the performance of the contract, even if the notice period was satisfied. Baycrest breached its duty of good faith in the exercise of its right of termination.
Feb 26, 2021 · The SCC noted that honest contractual performance is a manifestation of the more general duty of good faith and constrains the exercise of contractual discretionary powers. To exercise such contractual discretionary powers dishonestly is to breach the contract.
Nov 14, 2014 · The Supreme Court of Canada has issued a significant decision on the duty of good faith in the law of commercial contracts. In Bhasin v. Hrynew, the Court recognized good faith contractual performance as a general organizing principle of contract law and recognized a new “duty of honest performance” in the fulfillment of contractual ...
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Dec 21, 2020 · At the outset of the decision, the Supreme Court confirmed that the breach of the duty of honest performance must be linked to the performance of obligations under a contract or to the exercise of rights set forth in the contract.
