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Dec 21, 2020 · In Callow, the Supreme Court of Canada held that: Parties to a contract have a duty of honest performance, as the Court first recognized six years ago in Bhasin v. Hrynew. [2] This duty “applies to the performance of all contracts and, by extension, to all contractual obligations and rights”. [3] Further, parties are “not free to exclude ...
- Brandon Kain
Speaker, Law Society of Prince Edward Island, Professional...
- Brandon Kain
Jan 18, 2021 · For example, if Party A has created a false impression about Party B’s performance of the contract, and Party A does not correct that false impression, which then leads to damages to Party B; Party A could be liable for breach of the duty of honest performance. This new expansion of the duty to act honestly has the potential to complicate ...
Feb 12, 2021 · The SCC held that the manner in which Baycrest exercised the termination clause was dishonest, and as a result breached the duty of honesty, even though the 10-day notice requirement was satisfied. The duty of honest performance in a contract was developed in the 2014 Supreme Court case of Bhasin v. Hrynew. The duty applies to all contracts and ...
The duty of honest performance underpins all contractual rights and obligations. Eight of nine judges of the Supreme Court (Côté J. dissenting) allowed the appeal and found in favour of Callow. Baycrest breached its duty of honest performance by deliberately misleading Callow about Baycrest’s decision to terminate the winter contract.
The duty of honest performance requires that no contractual right, including a right of termination, be exercised dishonestly and thus, contrary to the doctrine of good faith. Measure of damages: A breach of the duty of honest performance will attract damages according to the ordinary contractual measure. The ordinary measure awards contractual ...
Dec 23, 2020 · The Court of Appeal also found that Baycrest's conduct did not rise to the high level required to establish a breach of the duty of honest performance and that, in any event, any deception in the communications that took place during the summer related to a new contract not yet in existence (i.e., the renewal) and was not directly linked to the performance of the winter maintenance agreement.
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The Court noted that the law had developed piecemeal prior to this decision, and the ruling was meant to “recognize a new common law duty that applies to all contracts as a manifestation of the general organizing principle of good faith: a duty of honest performance, which requires the parties to be honest with each other in relation to the ...
