Good Faith Performance

Question 1

Bhasin v Hrynew, 2014

Answer 1

• Organizing principle of law, implied rather than in fact, that there is a general obligation to perform every contract in good faith where the parties must act honestly
• The duty of good faith performance arises with the performance of a contract rather than the formation of a contract, unless the formation flows from performance through a renewal clause
  
  • Renewal clauses relate to the performance of the first and the second contract through renewal overlap
  • There is a duty to act in good faith in performing the first valid contract, including its renewal clause which leads to the formation of a second contract that must also be performed in good faith