Good Faith Dealings in Contractual Relations – Be Dutch, not Canadian

Growing up as the child of Dutch immigrants telling a “white lie” to spare someone’s feelings was not a concept I was familiar with.  If you’ve watched Ted Lasso, you know that the Dutch Soccer player is referred to as blunt, not mean and that pretty much sums up the stereotype of my relatives.

Of course, as a Canadian, saying sorry has been ingrained into me and I have observed that many second generation Canadians (and beyond) will spare someone’s feelings with a white lie.  That’s fine if you’re pretending to like a double, double  (I grew up drinking black, strong coffee …. See the reference to being the child of Dutch immigrants above) but it’s not ok when it comes to contracts.

If you’re dealing with a contract and asked a question about it, you need to be honest.  If you are not, you may find yourself liable for damages for breach of good faith dealings.   This was the case in a Supreme Court of Canada decision call C.M. Callow v. Zollinger.  In that case, a snow removal company was led to believe that their contract would be renewed by members of a condominium corporation . Instead of being renewed, the contract was terminated (as the contract allowed) on 10 days notice. 

The Supreme Court awarded damages against the condominium corporation including the lost profits and cost of “freebie work” the snow removal company had done hoping to get the contract renewed.

So.  The moral of the story is that when it comes to contracts, it’s better to be Dutch and blunt, than Canadian and polite.

Unsure if you’re being Dutch or Canadian?  Reach out with your specific issue and we’ll provide guidance!

Inga B. Andriessen, JD  Principal Lawyers

 

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