A recent ruling of the British Columbia Court of Appeal, A & G Investments Inc. v. 0915630 B.C. Ltd., 2014 BCCA 425, provides a useful primer on the available mechanisms for bringing a contract to an end. These include:
- the committing of a fundamental breach (leading to termination of the agreement if the breach is acted upon by the innocent party);
- the triggering of an express termination provision; and
- the acceptance by the innocent party of a repudiation (thereby causing the agreement to be rescinded).
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Are parties under a duty of good faith in deciding whether to exercise a right of non-renewal when the term of an evergreen contract comes to an end? In Bhasin v. Hrynew, 2013 ABCA 98, the Alberta Court of Appeal said no, at least where the evergreen clause does not contain an express provision to this effect. The ruling in Bhasin contains an extensive review of the law in this area, and may well prove to be the most important Alberta case on the duty of contractual good faith since Mesa Operating Ltd. v. Amoco Canada Resources Ltd. … Continue Reading