Good Faith in Contract: Case Study of Anytime Fitness Franchise

This report examines the concept of good faith in contract law, focusing on a case involving the Anytime Fitness franchise. The analysis explores various agreements, including lease, sales and purchase, rent deferment, and asset purchase agreements, along with a small business loan. The report identifies instances where a lack of good faith affected contract validity, such as unclear terms, misrepresentation, and fraud. Key issues include immediate possession of assets without proper consent, unclear financial adjustments, and violations of third-party rights. The conclusion emphasizes how the absence of good faith, particularly in areas like lease agreements and payment terms, led to contractual issues. The report references relevant legal literature to support its findings and provides a comprehensive understanding of good faith's importance in contract law.

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Good Faith in Contract
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Introduction
The objective of this report is to identify facts of good faith essential to deal in a contract and
impacts on contract validity in case of their absence. This research paper will discuss facts of
contracts took place between
Plaintiff: 1802248 (Numbered Company) and Ryan Johnson and Tatiana Johnson for
operating the Anytime Fitness
And
Defendant: 2487048 Ontario Limited, Mike Allen, Clark Kent and Orion Fitness Inc
This case has numerous kinds of agreements as Lease agreement, Sales and purchase
Agreement, The Rent Deferment Agreement, The Asset Purchase Agreement and a small
business loan. This report will analyse the facts affected to the concept of the good faith in
the case (Eggers & Picken, 2017).
Facts of the case
This case has many agreement with many parties and proceeding of this contract has many
issues, initially this contract was found as an agreement that Ryan Johnson and Tatiana
Johnson with 180 to operate a business in the name of Anytime Fitness. Further, this business
made lease agreements and asset purchase agreement that were made personally in the name
of Johnson. Lack of facts, proper duration, and date exist in many terms (Carter & Courtney,
2016).
Issues
There are many points considered as lacking good faith of the contract and this affected the
proper and valid processing of the contract. As deeply analysed in the case that there were
many aspects found strange in the case

On October 30, 2015, APA signed and party got immediate possession without talking NOC
or consent from property owner. As the immediate possession led access to income to 248 but
the expenses were still in account payable for Johnson. Along with many other issue
agreements of the rent and other adjustment were very unclear causing misrepresentation and
fraud in the contract (Eggers & Picken, 2017).
Good faith dealing in contracts
The doctrine of good faith and fair dealing is the darling of contract law. Good faith is the act
of giving their best and clear in the contract, a contract is valid when parties are clear, aware
and consent over the same. However here in case of Anytime Fitness centre all parties are
different and not agree with consent over same agreement. Immediate business transfer to
248 was not in consent of property owner hence it falls in unethical behaviour or fraud.
As a rule contractual act and agreement affect only legal relationship between the parties, but
in the above given case certain act of the 1980 company and 248 company violates the rights
and interest of the third party that is property owner, it leads the violation of the constitutional
rights and imposed limits to the freedom of the third party. Lack of proper understanding and
mutual consent violating the rights of entering parties is act of fraud and undue influence.
Conclusion
Base in the above analysis and facts of the case this report concludes that there were many
acts recognised as violation party’s right and willingly hiding the faces related to lease
agreement, payment of cheque and inapplicability of the lease agreement lead the issues
lacking the good faith in the case.

References
Carter, J. W., & Courtney, W. (2016). Good faith in contracts: is there an implied promise to act
honestly? The Cambridge Law Journal, 608-619.
Eggers, P. M., & Picken, S. (2017). Good faith and insurance contracts. Taylor & Francis.