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ARTICLE · 13 MAY 2022

Silence Doesn't Always Equal A Breach Of Good Faith

Daoust Vukovich LLP
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Our March 26, 2021 News ReLease titled "Expanding Bhasin: Acting Honestly Includes Correcting False Impressions" reviewed the Supreme Court of Canada decision, CM Callow Inc v Zollinger.

CanadaReal Estate and Construction
Jamie Paquin
Jamie Paquin

Our March 26, 2021 News ReLease titled "Expanding Bhasin: Acting Honestly Includes Correcting False Impressions" reviewed the Supreme Court of Canada ("SCC") decision, CM Callow Inc v Zollinger ("Callow"). In Callow, the SCC held that if a party to a contract remains silent while aware that it has caused its counterparty to operate under a misapprehension, that party may be liable for breach of the duty of good faith. Since then, two court rulings have taken a nuanced approach to the Callow holding.

Subway Franchise Restaurants of Canada Ltd. v BMO Life Assurance Co.

The Tenant entered into a lease for a ten-year term, with two 5-year renewal options. To exercise the first renewal option, the Tenant was required to give notice not less than 9 months and not more than 12 months before the expiry of the initial term.

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