Historically the common law had no general doctrine of good faith in contracting. Since 2014, the Supreme Court recognises good faith as an organising principle that underlies more specific legal rules.
Flowing from it is a duty of honest performance: parties must not lie to, or knowingly mislead, one another about matters directly linked to the performance of the contract. The duty applies to all contracts and cannot be wholly excluded by agreement.
Supreme Court of Canada
Bhasin v Hrynew
2014 SCC 71 · Nov 13, 2014
The Court recognised good faith as an organising principle of Canadian contract law and established a duty of honest performance: parties must not lie to, or knowingly mislead, one another about matters directly linked to the performance of the contract.
Pre-2014
No general doctrinePrior law
Good faith appears only in scattered categories, not as a unifying principle.
2014
Bhasin v HrynewLeading case
2014 SCC 71
Good faith is named an organising principle; a duty of honest performance is created.
2020–
Duty applied and extended
Later cases apply the honesty duty to the exercise of discretionary contractual powers.