Legal Blog

Good Faith

2161907 Alberta Ltd. v. 1180673 Canada Inc. 2021 Ont CA

Good faith requires that parties generally must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily. A party must have appropriate regard to the legitimate contractual interests of the other contracting party and not attempt to undermine those interests in bad faith. However, good faith does not require contracting parties to serve each other’s interests. Accordingly, the breach of a license agreement and a lease that was not made dishonestly, but rather was simply made in error, does not constitute bad faith.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.