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The Lay of the Land DEVELOPMENTS IN CANADIAN REAL PROPERTY LAW

Tag Archives: contractual obligation

Bhasin Two Years On: The Impact of Bhasin v. Hrynew on the Practice of Canadian Commercial Real Estate Law

Posted in Commercial

Edited and approved by Ben Leith

In 2014, the Supreme Court of Canada in Bhasin v. Hrynew (“Bhasin”) established good faith contractual performance as a general organizing principle of the common law of contract and created a specific duty of honesty in contractual performance – ultimately, imposing a stand-alone duty of good faith. Despite Justice Cromwell’s repeated assertions that the judgement in Bhasin was an incremental step in the common law, Canadian legal scholars and prominent Canadian law firms dubbed it a “landmark” decision that would transform the manner in which business parties performed their contractual obligations.… Continue Reading

Charlie and the Foosball Table: A Lesson in Good Faith and ROFR

Posted in Litigation, Policy, Residential

On a recent hot summer-like day, my neighbours’ pre-school boy, Charlie (pseudonym), sauntered over the front lawn in his pajamas to peek into my garage. Charlie had his gaze fixed on the foosball table, once a crown jewel of my college days and now just collecting dust in a corner. Charlie asked in the sweetest manner “can I play with that”? Normally, this would not be an issue. However, in an attempt to preserve all of Charlie’s limbs until at least adolescence, I replied that he could play only after I had vacated the menacing and precariously-balanced machines surrounding the … Continue Reading

The Binding Non-Binding Letter of Intent

Posted in Commercial, Policy

Proposed parties to a transaction often enter into a letter of intent to reflect the basic terms of the deal. These letters are usually expressed to be non-binding (with the exception of the confidentiality and exclusive dealing provision). The parties then begin negotiating definitive binding agreements. An unintended consequence of the activities taken during the negotiating period can turn the non-binding letter of intent into a binding agreement. … Continue Reading

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