Background: Amacon Alaska Development Partnership purchased commercial premises leased to ARC Digital Canada Corp. for redevelopment, necessitating early lease termination. Negotiations led to a Lease Modification Agreement in which ARC agreed to vacate early for compensation. ARC delayed signing until securing new premises. Amacon later refused to sign the agreement, citing "market conditions," and did not pay the initial $290,000 compensation. ARC sued for specific performance and damages.

Legal Arguments/Issues: The key legal issues were whether Amacon breached its duty of honest performance and good faith, and whether ARC's delay in vacating the premises was justified. Amacon argued that the trial judge misapplied contract law principles and made factual errors. ARC claimed that Amacon's refusal to sign and compensate constituted a breach of contract and acted in bad faith.

Held: The court dismissed Amacon's appeal, affirming the trial judge's findings. It held that Amacon breached its duty of honest performance by failing to sign the Lease Modification Agreement and withholding the initial payment. The court found that the trial judge correctly applied principles of good faith and contract law. It also supported the trial judge’s decision to proceed by summary trial and make credibility findings based on affidavit evidence.

Costs/Damages Awarded: ARC was awarded a total of $369,260, which included the second $290,000 payment and $79,260 for rent paid after June 30, 2019. Amacon's counterclaim for double rent and legal fees was dismissed.