Learning Exercise 2

Answer the following questions

1. Can behaving dishonestly in the context of a contract, i.e. one party not being honest "in relation to the performance of their contractual obligations" become the cause of a breach of contract in common law of contract in Canada? Explain your answer and also refer to court evidence to support your explanation as to how you know it and why.
2. What is a 'good faith performance' according to which all contractual obligation must be carried on? Which Canadian court case clearly and firmly established that?
3. Can parties contract out of their duty of acting honestly towards one another, i.e. can it be excluded in a contract? Explain why? How do you know that?
4. In a 'cost plus' contract, what amount of additional charges on top of a reasonable cost will count as "dishonest"? How do you justify your claim? What should concepts should be known before we can answer that question? Refer to a court case or a law if you can.

Provide detailed answers