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Good faith and honest contractual performance

In November 2014, the Supreme Court of Canada released a significant decision in Bhasin v. Hrynew, which recognized a new general duty of honesty in contractual performance. The court introduced “two incremental steps.” First, it acknowledged an “organizing principle” of good faith in contract law. Second, it recognized a new common law duty to act honestly in the performance of contractual obligations. In light of the potentially wide-ranging effects of this decision, parties will need to consider their performance obligations and behaviour.

Let’s explore the decision in greater depth by testing your knowledge of its possible implications.

Whether it is to welcome new
American tenants (i.e. Target,
J. Crew, and Crate & Barrel), to
convert buildings to become
LEED certified, or to entice more
shoppers to come into their centre,
many shopping centres and
office buildings in Canada have
recently completed, or are in the
midst of, expansion and modernization.
For example, in Toronto
alone, a major renovation of two
food courts at the Eaton Centre
has occurred, Yorkdale Shopping
Centre is undergoing a major
expansion to accommodate
more tenants, and First Canadian
Place has re-skinned its exterior
walls and windows and
renovated its common areas and
retail spaces. How do you think
different types of redevelopment


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