The Principle of Good Faith in Contractual Performance: A Scottish-Canadian Comparison

Abstract

The Supreme Court of Canada’s decision in Bhasin v Hrynew was ground-breaking for its acknowledgement of good faith as a general organising principle of contractual performance in common law Canada. Its other important contribution was to recognize a new duty of honesty in contractual performance such that parties must not lie or knowingly mislead the other party about matters directly linked to contractual performance. This article outlines the scope of the good faith principle and concludes that adoption by Scottish courts of a similar principle would be helpful, particularly as it relates to the exercise of contractual discretions and contractual remedies.

Keywords: Good faith and contracts Canada and Scotland