Bhasin and honesty when performing a contract

In Bhasin v. Hrynew, 2014 SCC 71, the Supreme Court recognized a duty of honest contractual performance. Parties must not lie or knowingly mislead each other about matters directly connected to performing their contract. The dispute arose from dishonest conduct surrounding the non-renewal of a commercial agreement.

Mr. Bhasin operated within a business relationship involving the marketing of education savings plans. The dispute included misleading statements about a competitor's role and a planned restructuring before the agreement was not renewed. The Court recognized honest performance as a general contractual duty while distinguishing it from a fiduciary obligation of loyalty. The significance lies in how contractual rights were performed, not in a rule that a commercial relationship must continue indefinitely whenever one party wants renewal.

The decision does not create a general obligation to put the other party's interests first or disclose every business intention. The practical issue is whether conduct crossed into dishonesty in contractual performance. Preserve the agreement, relevant statements, and records showing what the parties knew and did. For an Ontario business dispute, distinguish a disappointing contractual outcome from a legally supported allegation of dishonest performance. The remedy also requires proper analysis of the breach and resulting loss.

To assess a similar allegation, prepare a statement-by-statement record. Identify what was said, who knew it was misleading, how it related to contractual performance, and what loss followed. Keep the complete contract and communications, including material that may support an innocent explanation. A business decision can be unfavourable without being dishonest, and a dishonest statement must still be connected to a proper remedy. Practical preparation should therefore address the actual representation and its consequences rather than using good faith as a general label for every difficult negotiation or termination.

Sources

• Bhasin v Hrynew 2014 SCC 71
• C M Callow Inc v Zollinger 2020 SCC 45

Read next: Callow and misleading conduct before contract termination

General Ontario legal information, not legal advice for your matter, and reading it does not create a retainer. Sources checked 15 October 2026: check the current law, forms and dates before you act.

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This article is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.