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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 ...
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Oct 19, 2021 · Zollinger, 2020 SCC 45, the Supreme Court of Canada (SCC) expands on the scope of the duty of honest performance in contractual relationships, previously established by the SCC ruling in Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494. Our firm previously blogged about the Court of Appeal Ruling in this case. See the previous blog here.
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.
- Background
- The Decision
- Key Takeaways
The case involved a dispute between therespondent, a group of condominium corporations (“Baycrest”), and theappellant, C.M. Callow Inc. (“Callow”), regarding a two-year wintermaintenance contract (the “Contract”) and separate summer maintenancecontract, both executed in 2012.TheContract stipulated that Baycrest was entitled to terminate the Contrac...
With only one dissent,the Supreme Court set aside the decision of the Ontario Court of Appeal andfound that the duty to act honestly in performance of the contract precludedthe active deception by Baycrest by which it knowingly misled Callow intobelieving that the Contract would not be terminated. At the outset of its decision, the SupremeCourt rei...
The decision in Callow, and inparticular its expansion of the duty of honest performance to prohibithalf-truths, omissions, or silence, under certain circumstances, and not merelyovert dishonesty, will require parties to a contract to tread very carefullywhen engaging with counterparties when termination, contract renewal, or othermaterial matters,...
Nov 17, 2014 · That said, in a nod to the importance of the principle of freedom of contract, the Court ruled that parties will be permitted to establish terms “influencing the scope of honest performance in a particular context” provided that it doing so the parties “respect [the duty’s] minimum core requirements”. (at para.
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 ...
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[It] does not impose a duty of loyalty or of disclosure or require a party to forego advantages flowing from the contract; it is a simple requirement not to lie or mislead the other party about one’s contractual performance. The Court stated that the duty of honest performance should not be confused with a duty of disclosure or of fiduciary ...
