Shoosmiths on good faith: High Court decides to swim with the tide and recognise fair dealing
In the recent case of Yam Seng Pte Ltd v International Trade Corporation Ltd, the High Court decided to swim with the tide and recognise an implied duty of good faith and fair dealing. Yam Seng had entered into a distribution agreement with International Trade Corporate. Under it, Yam Seng was granted exclusive rights to distribute certain fragrances bearing the Manchester United brand name. In July 2010, the relationship between the parties ended sourly, with Yam Seng terminating the agreement on the basis of ITC’s alleged breaches.
Among Yam Seng’s arguments for breach of contract was its claim that an implied term of the agreement was that the parties would deal with each other in good faith. The High Court had to consider whether there was such a duty in the context of the agreement between the parties.
In reaching its decision, the High Court compared the English law position - namely that there is no general legal principle of good faith - against the recognition of such a principle in other jurisdictions. Justice Leggatt commented that English Courts were “swimming against the tide” in refusing to recognise a general requirement of good faith in the performance of contracts…
If you are registered and logged in to the site, click on the link below to read the rest of the Shoosmiths briefing. If not, please register or sign in with your details below.
News from Shoosmiths
News from The Lawyer
Briefings from Shoosmiths
As we head towards 2014, the finance market is becoming more optimistic and competitive.
Failing to proceed with due diligence: can this constitute a repudiatory breach of a building contract?
The Technology and Construction Court examined this issue in two cases and found in each case that it was not a repudiatory breach on the facts of the case.
Analysis from The Lawyer
Compliance and corporate governance codes for large financial institutions will undoubtedly include provisions to regulate high pay in the future
There’s more to the ABS model than attracting the man in the street and procuring external investment. Partners at the big corporate firms, take note…