The Supreme Court of Canada released its long-anticipated decision in Wastech Services Ltd v Greater Vancouver Sewerage and Drainage District today, a major decision concerning the scope of the.
not breached. The Greater Vancouver Sewerage and
Drainage District (
Metro ) and Wastech
Services Ltd. (
Wastech ) entered into a
long-term contract for the removal and transportation of waste to
three disposal sites. The contract gave Metro absolute
discretion to allocate waste between the sites and provided
that Wastech would be paid a different rate depending on the site.
In 2011, Metro reallocated waste in a way that resulted in
Wastech s not achieving a cost/revenue target identified in the
contract. The Court held that this reallocation did not breach
Metro s duty to exercise its contractual discretion in good
faith because it was consistent with the purposes for which the
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Despite the pandemic defining much of 2020, five key decisions
were released last year of lasting impact to businesses and
commercial dealings.
Expanding the Duty of Honest Performance
In
C.M. Callow Inc. v. Zollinger, 2020 SCC
45, the Supreme Court of Canada expanded the duty of
honest performance, holding that it requires that parties to a
contract must not lie or otherwise knowingly mislead each other
about matters directly linked to the performance of the contract.
This duty is breached where a right under a contract was exercised
Introduction
C.M. Callow Inc. v.
Zollinger
1
, the Supreme Court of Canada
(
SCC ) clarified the scope of the duty
of honest contractual performance, as recognized by the Court in
Bhasin v. Hrynew
Bhasin, and further expanded on in
C.M.
Callow, the duty of honest contractual performance is one of
the manifestations of the organizing principle of good faith in
performance of contracts. While the organizing principle of good
faith usually manifests itself in specific legal doctrines, such as
the doctrine of unconscionability, and in specific types of
contractual relationships, such as those where the parties are
required to cooperate to achieve the objectives of the contract and
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While COVID-19 forced us to work under lockdown last year,
Canada s court system continued to conduct hearings
electronically. In doing so, the highest courts in the land
delivered a number of precedent-setting decisions which have
changed the way that we view written contracts under the
law. While these decisions have been praised as positive
developments, they have also been met with controversy, in that
there is some concern that they may compromise the sanctity of
written agreements.
Unconscionability and Contractual Enforcement
Last June, the Supreme Court of Canada handed down a