New duty of good faith in the performance of contracts.

In a decision released earlier this month, the Supreme Court of Canada has imposed a new duty of good faith in the performance of contractual obligations.

The decision is Bhasin v. Hrynew, 2014 SCC 71, and the link to the full decision is here:

     http://scc-csc.lexum.com/scc-csc/scc-csc/en/item/14438/index.do

The court summarized the new requirement as follows:


     "It is appropriate to recognize a new common law duty that applies to all
     contracts as a manifestation of the general organizing principle of good
     faith:  a duty of honest performance, which requires the parties to be honest
     with each other in relation to the performance of their contractual obligations.

     Under this new general duty of honesty in contractual performance, parties
     must not lie or otherwise knowingly mislead each other about matters directly
     linked to the performance of the contract.  This does not impose a duty of
     loyalty or of disclosure or require a party to forego advantages flowing from
     the contract; it is a simple requirement not to lie or mislead the other party
     about one’s contractual performance.  Recognizing a duty of honest
     performance flowing directly from the common law organizing principle of good
     faith is a modest, incremental step."  [Emphasis added - AK.]


To put this into context, the usual rule in contract law used to be that the parties did not owe each other any duty of good faith when it comes to negotiating the terms of contracts (formation), nor in performing their obligations under the contract (performance).  That certainly didn't (and still doesn’t) mean that a contracting party was free to lie to, mislead, blackmail, or cheat the other contracting party, but equally a contracting party was entitled (and expected) to act in its own best interests first and foremost.  Thus, until this decision, generally there was no higher or elevated duty of good faith owed by contracting parties to each other with respect to either the formation or the performance of “regular” contracts.  (There are certain types of contracts which require utmost good faith by the parties, with respect to both formation and performance.  One example of a contract of utmost good faith is a life insurance contract.)

This recent Supreme Court of Canada decision now means that the parties to a “regular” contract owe each other a duty of honest performance.

This decision does not change the existing obligations owed by contracting parties to each other with respect to the formation of contracts.  There are plenty of legal rules which protect contracting parties in situations involving duress, undue influence, and misrepresentation, among other things.  But, as yet, there is no general duty of good faith owed by contracting parties to each other with respect to the formation of contracts.

In the world of contract law, this is a Big Deal.  This new rule gives the court another way to protect an innocent contract party who has been lied to or cheated by the other contracting party with respect to that other party's performance of the contract.

Andrew.

Online Mediation

In situations where the parties to a dispute cannot meet face-to-face at a mediation session, Online Mediation can be the solution.

For example, where the parties and the mediator live in distant cities or towns, the travel time and expenses for everyone to gather in the same place for a face-to-face mediation might be too significant in light of the issues or amounts of money in dispute.  Or one or more of the parties might be unable to travel away from their home town for, say, medical reasons or due to work or other commitments.  For people caught in this bind, Online Mediation often can help.

To participate in an Online Mediation, the parties only need the following:

- a computer or mobile device with video and sound capabilities (a desktop or laptop computer with a webcam, or a tablet/smartphone, usually do the trick);

- a high-speed Internet connection (for a tablet or smartphone, 3G is acceptable but makes for blocky video; 4G/LTE is better; and high-speed wifi is best); and

- a private room at their location.

The mediator schedules and conducts the online mediation through an online videoconference service provider (such as WebEx or Zoom.us, among others).  These videoconference platforms also allow the mediator to post documents, photos, and other materials for everyone to review and discuss during the mediation.  The technology is easy to use, even for someone who is not completely comfortable with computers or other electronic devices.

In many disputes, a face-to-face mediation with everyone in the same room is the better way to go.  But in situations where an in-person mediation is not an option, then Online Mediation can be a solution.

I have completed the Facilitation Skills for Online Mediation course offered through Royal Roads University, and I now offer Online Mediation as part of my mediation practice.

Wills and Estates discussion on CFIS 93.1 FM

Senior Moments is an hour-long radio show broadcast Tuesdays at 1:00 p.m. on CFIS 93.1 FM in Prince George.  I was one of the guests on the show on August 19, discussing Wills and Estates issues.

Here is the link to the podcast of the show:

     http://seniormoments.buzzsprout.com/5064/198254-senior-moments-episode-137

I hope you find the information useful.

Member of the Civil Roster of Mediate BC

I am now a member of the Civil Roster for Mediate BC.

Among other things, Mediate BC maintains a list of civil law mediators who have met specified requirements and standards for education, experience, and good character as mediators.

As a member of the Civil Roster, I may act as the mediator in an ICBC claim.

I am also eligible for appointment as a mediator under any of the several Notice to Mediate Regulations in British Columbia.

The types of cases which I am available to mediate include the following:

• ICBC claims
• other personal injury claims, including "slip and falls"/"trip and falls"
• occupier's liability claims
• wrongful death claims
• wills and estates disputes
• wills variation claims
• construction disputes
• employment wrongful dismissal claims
• shareholders and partners disputes
• contract disputes

I'm willing to travel anywhere in north-central and northern British Columbia for a mediation, year-round.

I'm also willing to schedule a mediation on very short notice if I'm available.  In my experience, some disputes lend themselves to settlement discussions very early on, before people's positions start to harden or the situation begins to fester and get even worse.

Want more information?  Check out the Mediation page on my web site, or just give me a call (250-564-5544, or toll-free 1-877-964-5544).

Want to know my mediation fee rates?  Just contact me, and I'll send you my current mediation fee schedule.

Want to book a mediation?  Just call my secretary, Stephanie Sorell (250-564-5544, or toll-free 1-877-964-5544), and she'll take it from there.