Contract Law Update 2015: Developments of Note


We find ourselves in a world where many contract law principles have been settled or clarified by SCC jurisprudence over the last decade. To refresh your memory, some of the key SCC decisions (and their subject matters as they pertain to contract law) are:

  • Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53: Confirmed that a question of contract interpretation is a question of mixed fact and law and that the surrounding circumstances (or factual matrix) are to be considered in every contract interpretation exercise, not just where there is an ambiguity.
  • Bhasin v. Hrynew (“Bhasin”), 2014 SCC 71: Articulated the new duty of honesty in contractual performance (not to lie or mislead the other party about one’s contractual performance) and mapped out an overarching organizing principle of good faith.
  • Payette v. Guay, 2013 SCC 45: Confirmed that restrictive covenants in commercial contracts (particularly where there was no imbalance of bargaining power and the parties had professional advisors) are not as rigorously scrutinized as restrictive covenants in employment contracts.

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