Good Faith as An Organizing Principle in Contract Law: Bhasin v Hrynew – Two Steps Forward & One Look

Abstract

Over the last three decades Canadian contract law has wrestled with the question of whether there should be a formal recognition of duty to act in good faith. Outside the context of Quebec civil law, the Supreme Court has declined to recognize a pre-contractual duty to bargain in good faith. In the 2014 decision in Bhasin v Hrynew, the Court did fashion a modest role for the good faith performance of contractual obligations, leaving to be answered the question of whether this good faith requirement can trump the specific provisions of a contract. Despite its limited scope, the precedential significance of the decision in Bhasin v Hrynew should not be underestimated, as it lays a solid foundation upon which the tenets of the good faith doctrine can be applied in such a manner that the certainty and predictability of the law are preserved.