Practical Takeaways About the Good Faith Obligations in Your Contracts

This seminar will provide an update on recent Supreme Court of Canada and Alberta cases on the duty and limits of good faith and honest performance in commercial contracts.

In 2014, the Supreme Court released its groundbreaking decision in Bhasin v Hyrnew, which pronounced that the organizing principle of good faith underlies all contracts and obliges contracting parties to perform their obligations honestly. Since then, the Court has further confirmed that parties must exercise powers of contractual discretion in a good faith and non-capricious manner in its 2020 and 2021 decisions of Callow v Zollinger and Wastech Services Ltd v Vancouver Sewerage and Drainage District. Over the past year, Alberta courts have applied these principles and been faced with the task of considering whether contracting parties are exercising their contractual rights contrary to these duties.

The lessons learned from these novel and evolving cases are applicable and important to all parties with contractual rights and obligations, whether the words “good faith” expressly appear in their contract, or not.