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Reasonability, Good Faith and Discretion in Commercial Leasing: A Contrast Between Canada and the United States

Jun 4, 2012 | Article 

Written by Natalie Vukovich
(ISCS Shopping Centre Legal Update -  Vol. 32, Issue 2)

In both Canada and the United States, there is a legal doctrine of good faith in commercial contractual dealings. Where Canadian and American courts have differed is in the meaning of good faith and the application of the concept. 

Likewise, in the exercise of approval rights or the making of determinations, designations, or decisions within commercial contracts, both Canadian and American courts contend with the rights of a party to rely on its own discretion as contrasted with the obligation to act reasonably. In both Canada and the United States, a reference to reasonableness imports an objective standard. However, the right to exercise discretion (whether sole and absolute, unfettered or arbitrary), leads to different outcomes on either side of the border.

Read the full article Reasonability, Good Faith and Discretion in Commercial Leasing

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