Introduction to good faith in construction contracts

Abstract

Advocating good faith as a key element of construction contracts under a ‘new contract morality’, as it has been developed mainly in Canada, this paper presents the advantages of an open exchange of information, of an adequate way of treating the unavoidable contingencies and of a global approach of collaboration between all participants on a construction project.

Keywords:

• Construction law
• contract strategy
• collaboration
• dispute resolution
• good faith
• information
• morality

Notes

1. As opposed to the other nine provinces and two territories of Canada, where common law rules.

2. Houle v. Canadian National Bank [1990] 3 S.C.R. 122; Bank of Montreal v. Bail [1992] 2 S.C.R. 554.

3. Thibierge‐Guelfucci, 1997, at pp. 377ff.

4. Adapted from affectio contractus, referring to the affectio societatis—duty of cooperation, etc.—in corporate law (Thibierge‐Guelfucci, 1997, pp. 358 and 362).

5. Houle, note 2 above, at p. 167; Bail, note 2 above.

6. Houle, note 2 above, at pp. 145 and 146 (emphasis added).

7. Bail, note 2 above.

8. Urbye, NS 3430 E, 5 September 1992: Art. 3: Duty to cooperate: The parties undertake to cooperate and to exercise care during the performance of the contract.

9. General Conditions of contract—for building, civil engineering and installation works, AB 92, Construction contracts committee, translation revised 1995.

Chapter 3—Clause 17—Site Meetings: The parties shall be obliged to attend site meetings. Site meetings shall be held to the extent required and deal with matters common to the parties. The Employer shall keep records et site meetings and the records shall be checked and signed by the Contractor, unless otherwise agreed.

10. General Conditions—of turnkey contracts for building, civil engineering and installation works, ABT 94, Construction Contracts Committee, 1994.

11. Urbye, note 8 above, Art. 40.1—The parties shall attempt to settle dispute arising between them concerning the terms of the contract by amicable agreement.