What is the test for good faith performance in real estate transactions?

Newfoundland and Labrador, Canada


The following excerpt is from Day v G & G Homes Limited, 2016 CanLII 37559 (NL PC):

The Plaintiffs’ claim that the Defendant did not act in good faith in relisting the property for sale and forcing them to close the sale before they had an estimate of the fireplace cost and before deficiencies had been corrected. In Bhasin v. Hrynew, 2014 SCC 71, the court held that: … good faith contractual performance is a general organizing principle of the common law of contract which underpins and informs the various rules in which the common law, in various situations and types of relationships, recognizes obligations of good faith contractual performance. … There is an organizing principle … that parties generally must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily.

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