Exercising a contractual discretion and the obligation to act in good faith
When parties agree to include discretionary rights in their agreement, one party will have the right to determine the outcome of some matter in prescribed circumstances. It is well established, however, that the courts have sought to influence the operation of discretionary provisions by imposing obligations of good faith on commercial players in certain situations. The key questions to be considered are: when will courts impose an obligation of good faith, what does ‘good faith’ mean, and how can parties create commercial certainty.
This update looks at the landscape of good faith in the context of discretionary provisions as a matter of contract law in an attempt to provide readers with the necessary background to approach this area of law. The law is unsettled and can change from state to state — an understanding of the state of play will enable parties to be fully informed when entering into contractual arrangements…
If you are registered and logged in to the site, click on the link below to read the rest of the DLA Piper briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
The Australian Taxation Office released a draft ruling on the Goods and Services Tax treatment of bitcoin transactions on 20 August 2014.
DLA Piper’s ‘Life sciences: patent extension strategies and antitrust global update’ video covers global antitrust and competition issues including product hopping and reverse payment patents.
Analysis from The Lawyer
Cross-border work and political tensions are dominating this year’s entries for Finance Team of the Year at The Lawyer Awards.
Regulators are ramping up the pressure in the aftermath of recession, leaving firms to compete for compliance and restructuring work