Contract
Good Faith and Honest Performance
Bhasin and the organising principle.
Bhasin v Hrynew (2014) recognises good faith as an organising principle of Canadian contract law and identifies the duty of honest performance — a contracting party may not lie or knowingly mislead the other about matters directly linked to performance.
The principle underpins (without subsuming) related doctrines: cooperation, exercise of discretionary powers, performance. Subsequent cases (Callow 2020 on termination, Wastech 2021 on discretion) extend the analysis.
Key principles
- Good faith organising principleUnderpins existing doctrines and supports incremental development.
- Duty of honest performanceCannot lie or knowingly mislead about matters linked to performance. Cannot be excluded.
- Not a fiduciary dutyNo duty of loyalty or to subordinate one's own interests.
Cases (12)
Bhasin v. Hrynew
landmark2014 SCC 71
Supreme Court of Canada· 2014· Contract
Sattva Capital Corp. v. Creston Moly Corp.
landmark2014 SCC 53
Supreme Court of Canada· 2014· Contract
Tercon Contractors Ltd. v. British Columbia (Transportation and Highways)
landmark2010 SCC 4
Supreme Court of Canada· 2010· Contract
Mustapha v. Culligan of Canada Ltd.
landmark2008 SCC 27
Supreme Court of Canada· 2008· Contract
Hodgkinson v. Simms
landmark[1994] 3 SCR 377
Supreme Court of Canada· 1994· Contract
Moge v. Moge
landmark[1992] 3 SCR 813
Supreme Court of Canada· 1992· Contract
Hadley v Baxendale
landmark(1854) 9 Exch 341
Court of Exchequer (England)· 1854· Contract
Sainte‑Julie (City) v. Investissements Laroda inc.
2025 SCC 44
Supreme Court of Canada· 2025· Contract
10066055 Manitoba Ltd. v. Parks Canada Agency
2024 FC 266
Federal Court· 2024· Contract
2093271 Ontario Inc. v. Canada
2024 FCA 50
Federal Court of Appeal· 2024· Contract
2572495 Ontario Inc. v. Terlin Construction Ltd.
2024 FC 1366
Federal Court· 2024· Contract
Alhusaini v. Canada (Attorney General)
2024 FC 2033
Federal Court· 2024· Contract