Commercial contracts—Canada—Q&A guide
Commercial contracts—Canada—Q&A guide

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Commercial contracts—Canada—Q&A guide
  • 1. Is there an obligation to use good faith when negotiating a contract?
  • 2. How are ‘battle of the forms’ disputes resolved in your jurisdiction?
  • 3. Is there a legal requirement to draft the contract in the local language?
  • 4. Is it possible to agree a B2B contract online?
  • 5. Are there any statutory or other controls on parties’ freedom to agree terms in contracts between commercial parties in your jurisdiction?
  • 6. Are standard form contracts treated differently?
  • 7. What terms are implied by law into the contract? Is it possible to exclude these in a commercial relationship?
  • 8. Is your jurisdiction a signatory to the United Nations Convention on Contracts for the International Sale of Goods (the Vienna Convention)?
  • 9. Is there an obligation to use good faith when entering and performing a contract?
  • More...

This Practice Note contains a jurisdiction-specific Q&A guide to commercial contracts in Canada published as part of the Lexology Getting the Deal Through series by Law Business Research (published: May 2020).

Authors: Baker McKenzie—Arlan Gates; Vanessa Voakes

1. Is there an obligation to use good faith when negotiating a contract?

With the exception of the Province of Quebec, commercial agreements between businesses in Canada, such as supply contracts for the sale of goods and services, are governed by the common law and provincial, territorial and federal statutes. In Quebec, which is a civil law jurisdiction, the regulation of the sale of goods and commercial contracts is governed primarily by the Civil Code of Quebec. Unless expressly stated otherwise, the discussion below is focused on the common law provinces and commercial contracts for the supply of goods and services; different rules may be applicable to other forms of commercial contracts such as, for example, franchise agreements, mortgages, loans, agreements for the purchase and sale of land, construction contracts, among others. To the extent that readers are engaged, or are planning to engage, in business in or to contract with parties located in Quebec, specific advice from a qualified lawyer in Quebec should be obtained.

Under the common law, absent an express agreement to negotiate in good faith between the parties, there is no obligation for the parties to negotiate

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