Supreme Court: Ruling establishes honesty as the law for business

Mark Gelowitz

Nov 14, 2014

Jacqui McNish, Globe and Mail

(Recap)

Lying in business will be a lot more expensive after a Supreme Court of Canada ruling that establishes a ground-breaking new doctrine in contract law.

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In a unanimous ruling, a panel of seven Supreme Court justices rewrote centuries-old common law to clarify bewildering Canadian case law about the legal duty of businesses to act in good faith with companies and people with whom they have contracts.

Some areas of contractual law, such as employment, franchise and insurance agreements, already require a duty of good faith, but no such standard exists in the broader arena of commercial contracts.

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Mark Gelowitz, a litigator with Osler, Hoskin & Harcourt, said that, in light of the decision, he is advising clients to be more mindful of what they say. “Parties are going to have to be dramatically more careful in how they communicate with other parties to a contract.”

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