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In recent years, courts have layered some common sense into the way in which the Canadian judiciary decides contractual disputes between parties. In a series of rulings by the Supreme Court of Canada and provincial appeal courts, judges have tried to clarify contract law and the "good faith" obligations owed by contracting parties.

The courts have also broadened the principles and factors judges can use to determine guilt and liability when a party allegedly fails in its good-faith obligations, and have decided that judges can go beyond the literal words within a contract to infer broader intent.

Those entering into contracts now must ensure they are transparent in the execution of their obligations, says one lawyer. And that's not just a job for lawyers, but for anyone "interacting with the other party."

Lexpert contributor Anthony Davis reports at www.lexpert.ca.

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