Tuesday, December 3, 2013

No stand alone duty of good faith in contract

MHR Board Game Design Inc. v. Canadian Broadcasting Corporation, 2013 ONCA 728:

[5]          The appellants argue that the respondent was under a duty to edit the presentation in good faith.  However, as observed in Transamerica Life Canada Inc. v. ING Canada Inc. (2003), 68 O.R. (3d) 457 (C.A.) at paragraph 53:

…Canadian courts have not recognized a stand-alone duty of good faith that is independent from the terms expressed in a contract or from the objectives that emerge from those provisions.  The implication of a duty of good faith has not gone so far as to create new, unbargained-for, rights and obligations.  Nor has it been used to alter the express terms of the contract reached by the parties.  Rather, courts have implied a duty of good faith with a view to securing the performance and enforcement of the contract made by the parties, or as it is sometimes put, to ensure that the parties do not act in a way that eviscerates or defeats the objectives of the agreement that they have entered into.

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