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ARTICLE · 10 APRIL 2016

Tendering Law Post-Bhasin: Questions About Honest Contract Performance

Burnet, Duckworth & Palmer LLP
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The Supreme Court of Canada's recent decision in Bhasin v Hrynew, creating a general duty of fairness in Canadian contract law, may have implications for the law of tendering in Canada.

CanadaReal Estate and Construction
Matthew Kuhl
Matthew Kuhl
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Introduction

The Supreme Court of Canada's ("SCC") recent decision in Bhasin v Hrynew ("Bhasin")1, creating a general duty of fairness in Canadian contract law, may have implications for the law of tendering in Canada.

By establishing a duty of fairness and honest contract performance as a general doctrine of law (that limits freedom to contract), Bhasin could make it more challenging for Owners to avoid their obligations in Canada's Contract A/Contract B tendering framework.

The Ron Engineering Framework and Subsequent Developments

The SCC first established the Contract A/Contract B tendering framework in R. v. Ron Engineering and Construction (Eastern) Ltd.2 ("Ron Engineering"). According to this framework, submitting a bid in a tender process for a construction contract (Contract B) leads to an implied contract (Contract A) between each bidder and the issuer (typically an Owner, but potentially general contractors or major subcontractors as well).

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