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The Lay of the Land DEVELOPMENTS IN CANADIAN REAL PROPERTY LAW

Author Archives / Geoff R. Hall

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Towards a General Duty of Good Faith Performance of Contractual Obligations – Maybe

The duty of good faith in contract law: the cautious and inconsistent approach of Canadian courts

Posted in Commercial, Litigation

Courts in common law Canadian jurisdictions have been reluctant to recognize any general duty to perform contractual obligations in good faith. Such a duty is a central tenet of American law under the Uniform Commercial Code and is a central tenet of Québec civil law, which recognizes a duty of good faith throughout the contracting process. But common law courts in Canada, like their counterparts in England, have been loath to recognize any general duty. They have also been very inconsistent, finding a host of ad hoc circumstances in which a duty of good faith performance exists, but without ever … Continue Reading

The Doctrine of Mitigation in the Supreme Court of Canada: A Triumph of Theory Over Commercial Reality

Posted in Commercial

A troubling decision

It is troubling when contract law fails to accord with commercial reality. It is troubling when a commercial case ignores the underlying economic context. In Southcott Estates Inc. v. Toronto Catholic District School Board, the Supreme Court of Canada applied theoretically pure models of contract and corporate law to conclude that the victim of a breach of contract had failed to mitigate its damages. The victim of the breach was therefore denied its damages, which had been assessed at trial at $1.9 million. But in applying pure theory, Southcott ignored commercial reality and the underlying economic … Continue Reading