The Supreme Court of Canada (
SCC )
recently released its much-anticipated decision in
C.M. Callow
Inc. v. Tammy Zollinger et. al ( C.M.
Callow ).
1 The decision
revisits the common law duty of honest contractual performance six
years after the SCC s seminal decision in
Bhasin v. Hrynew
(
Bhasin ).
2 The
C.M. Callow decision clarifies what constitutes a breach of the
duty of honesty in circumstances where one party does not correct
the other s mistaken belief pertaining to the agreement.
Background: Unanswered Questions following
The SCC s unanimous decision in
Bhasin described
good faith as a general organizing principle in the
Canadian common law of contracts that requires parties to perform