Financial Post | Business

Generally speaking, good faith is not an implied term of Canadian commercial agreements. So, if a party has a right to terminate an agreement on notice, it can do so by providing notice, and that’s it.

This might change Thursday when the Supreme Court of Canada releases a case called Bhasin v. Hrynew.

The situation is a common one — an independent contractor was supplying services to another company, and that company terminated the agreement on notice as per the terms of the written agreement.

The contractor says “good faith” required the company to provide reasons for the termination. The company argues contract law should look only to what the parties agreed to, and nothing more.

A possible wrinkle: Canadian law recognizes good faith in a short list of specific situations, such as employment. It remains to be seen whether the court will treat this as an employment case.

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