The Principle of Good Faith in Contractual Performance: A Scottish-Canadian Comparison

Abstract

In 2014 the Supreme Court of Canada in Bhasin v Hrynew formally but cautiously acknowledged good faith as a general organising principle of contractual performance at common law and that the principle largely manifests by way of implied terms and through the new duty of honesty. Rejecting English recalcitrance on the subject, the SCC concluded that recognising a good faith principle makes the common law less unsettled and piecemeal, more coherent and just. The article suggests that the limitations placed on the good faith principle by the SCC make its potential adoption in Scotland offer more opportunity than risk, especially in relation to the exercise of contractual discretions and contractual remedies.