Good faith obligations in contract: are the English courts going soft?
Traditionally, English law does not recognise a general duty of good faith applicable to contracts (with certain limited exceptions, such as insurance contracts). Rather, the English courts recognise the right and freedom of commercial contracting parties to enter into an agreement on whatever terms they see fit and to prioritise their own self-interest (subject obviously to the usual constraints imposed by considerations of public policy, illegality and so on).
This is so irrespective of whether or not the courts might otherwise consider that one or other party has made a bad bargain or compromised itself commercially by what it has agreed to. The overriding principle is that the English courts will not rewrite the parties’ contract for them. Therefore, where it is intended that one or both parties should perform any or all of their obligations under a contract in good faith, this should be provided for expressly in the contract.
There have, however, been some recent cases in which the courts have considered whether a duty of good faith should be implied into certain types of contract, primarily long-term, ‘relational’ (i.e. involving mutual co-operation) contracts, and whether, in fact, English law should be (or is already) moving towards the attitude adopted in some other jurisdictions, mainly civil law systems, that recognise such an implied duty. This bulletin reviews these recent decisions and considers what, if any, future impact they may have on parties’ obligations under English law commercial contracts…
If you are registered and logged in to the site, click on the link below to read the rest of the Ince & Co 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 Ince & Co
News from The Lawyer
Briefings from Ince & Co
The Court of Appeal has confirmed the meaning of the expression “in-transit loss” in a voyage charter party in the Trafigura Beheer case.
A recent Commercial Court decision considered the position when a contract provides for the law of one jurisdiction to be applicable, but for the arbitration to take place outside that jurisdiction.