Although Common Law in the other Canadian provinces has chosen to treat the notion of equity differently, the Quebec legislature opted to include a general duty of “good faith” in the Civil Code of Québec, the latter being applicable to all the contractual and extra-contractual relationships within the province.
However, litigants often mistake the breadth of this obligation by thinking it is limited just to “not harming others.”
Rather, since the Houle v. Banque Nationale du Canada case in the Supreme Court of Canada, and several other more recent decisions that follow that judgment, the courts have repeatedly confirmed that the duty to act in good faith has a much larger extent and could even impose on parties a duty to collaborate with each other in order for the purpose of the contract to be achieved.
Indeed, both in terms of Civil Law, Commercial Law, Real Estate Law and even with regard to matters of Franchising Law, to name a few, courts have often used the concept of good faith to impose obligations on contracting parties that might not be immediately obvious. For example, courts have relied on the general duty of good faith to confirm, amongst other, the existence of duties of collaboration and information which may vary in degrees depending on the circumstances.
Harry Karavitis, Attorney-at-Law
Alepin Gauthier Avocats inc.