Beyond The Contract: The Duty Of Good Faith In Construction

Key Takeaways

Ultimately, good faith in construction is not an abstract concept: it is a legal obligation with significant practical consequences that can decide the outcome of a dispute. Whether it involves the duty to disclose information or the duty of consistency, courts do not hesitate to sanction conduct that falls short of the requirements of good faith, even when contractual provisions appear to favour the party at fault. 

To reduce risk, keep these few rules in mind: 

• Document all communications, verbal instructions, agreements in progress, notices of delay, and expressed reservations. In the event of a dispute, documented evidence is decisive. 
• Proactively disclose any important information if you are the project owner: omitting information could make you liable. 
• Avoid unjustified changes in position: if you have tolerated a practice for months, it may be difficult to retroactively claim damages for it.
• Be proactive and clearly express any reservations you intend to maintain as the project progresses. Prolonged silence, or worse, a positive action such as making a payment without reservation, could be interpreted as a waiver. 

Delays, changes, disagreements over site conditions: conflicts are not uncommon in construction projects, and they are often costly.

However, many construction industry participants are unaware that how they conduct themselves throughout a project, and not just what is written in their contract, can result in liability. 

Underlying this reality is the duty of good faith, a fundamental principle of the Civil Code of Québec that applies to all stages of a construction project. 

Given the limited statutory framework governing construction contracts, courts sometimes seek to bridge this gap by increasingly relying on this general duty of good faith, particularly to restore balance between the parties. 

This article provides an overview of the key principles in light of recent decisions.

The Legal Foundations of the Duty of Good Faith 

Good faith is defined as the absence of malicious intent by a person who believes they are acting with integrity and fairness. This concept is grounded in three articles of the Civil Code of Québec: 

• Section 6 C.C.Q. requires that civil rights be exercised according to the requirements of good faith;
• Section 7 of the C.C.Q. prohibits anyone from exercising a right to harm another person or in an excessive and unreasonable manner, contrary to the requirements of good faith; 
• Section 1375 of the C.C.Q. requires that good faith must govern parties' conduct at all stages of the obligation, from its inception to its termination. 

In other words, good faith is not merely a moral issue: it is a legal obligation that applies throughout the life of a construction project. From the earliest planning stages to project completion—and, in some cases, even after delivery—the parties must exercise their rights and perform their obligations in good faith. 

The duty of good faith also gives rise to a number of more specific obligations. Among the most significant are the duty to inform and disclose, which features prominently in the jurisprudence, and the duty of consistency, whose influence has become increasingly evident in recent years. 

Duty to Provide Information: Disclosing What One Knows (or Should Know) 

The duty to provide information rests on three main elements: 

• Knowledge of the information, whether actual or presumed, by the party which owes the obligation to inform; 
• The decisive nature of this information; 
• The creditor’s inability to obtain the information on their own or their legitimate reliance on the debtor.

The extent of this duty depend on the circumstances. It depends on the allocation of risks, the parties’ levels of expertise, and the evolving nature of the contract. Generally, the greater a party’s expertise, the higher their duty to disclose relevant information. 

The Duty to Inform: A Key Aspect of Good Faith in Construction Contracts

A Recent Example: Construction BSL inc. c. Procureur général du Québec (Ministère des Transports du Québec), 2025 QCCA 1438 

In this case, a contractor had bid on a project to repair two bridges on highway ramps in Gatineau. The tender did not include any geotechnical studies or information regarding water management issues on the job site, even though the engineering consultants retained by the project owner for the project’s design had anticipated heavy pumping operations requiring specialized equipment. Faced with unforeseen circumstances, including the presence of large boulders that prevented water management using standard methods, the contractor incurred substantial additional costs. 

Lessons From the Court of Appeal

The Court established an important practical principle: contractors are not required to “replicate in detail the work performed by the project owner’s experts.” (unofficial translation). They are entitled to rely on the project owner’s expertise, such as by assuming that the information provided regarding soil conditions is appropriate and sufficient.

A project owner who fails to provide relevant information in their possession, or who provides incomplete or misleading information, breaches their duty to disclose and may be held liable for the resulting consequences. 

This decision serves as a reminder that if you are a project owner and you (or your consultants) possess technical information likely to affect the costs, work methods, or risks related to the construction site, failing to clearly disclose this information in the bidding documents may result in your liability. 

That said, the duty to disclose is not one-sided: contractors are still required to consider all the information at their disposal and use reasonable diligence, particularly when it comes to factors that could have been identified during a site visit or that are evident in the bid documents. 

Duty of Consistency: Importance of Maintaining Consistent Behaviour Throughout the Contract 

The duty of consistency requires contracting parties to behave consistently over time, to honour their commitments, and to avoid unjustified changes in position. A party cannot create reasonable expectations in its counterparty, such as through repeated actions during the contractual relationship. This duty also promotes transparency. 

In construction law, courts primarily use this duty to sanction the conduct of a client who fails to honour agreements reached during the performance of the work, or whose conduct undermines the trust and reasonable expectations it has created in the contractor. 

A Recent Example: 175784 Canada inc. c. Grand Boisé de La Prairie inc., 2025 QCCS 3924 

In this case, a general contractor was awarded successive contracts for the various phases of a large-scale real estate development project. For more than two years, neither the client nor the firm hired to supervise the construction site had raised any concerns regarding delays or the contractor's failure to meet the contractual deadlines. 

Instead, a representative of the supervising engineer had told the contractor, “Don’t worry about the deadlines” (unofficial translation), and the client continued to entrust the contractor with additional phases of the project. Despite these representations and years of conduct suggesting that strict compliance with the contractual deadlines would not be enforced, the owner ultimately claimed contractual delay penalties and additional supervision costs. 

Lessons from the Court

The Court refused to enforce the penalty clauses for several reasons: the defendants were unable to establish when the alleged delays began or how long they lasted; the calculation methods used were not specified in the contracts and were inconsistent from one witness to another; the contracts had been substantially modified by approximately one hundred change orders; and the defendants had failed to demonstrate any harm resulting from the alleged delays. 

The Court also found that the defendants had breached their duty of consistency by creating, over a period of more than two years, a legitimate expectation that no penalty would be imposed.