Review Essay Good Faith In Public International Law
Those working in the construction industry will be aware that many standard forms of contract used domestically include obligations that could be commonly construed as good faith-type obligations.
Examples are perhaps most obviously apparent in partnering contracts and in clause 10.1 of the NEC3, which states that the parties should act in accordance with the Contract and in a spirit of mutual trust and cooperation.
The usual principles of contractual interpretation will apply.6 Often in cases where there is an express clause incorporating an obligation of good faith, parties seeking to rely on the clause have attempted to argue that the duty is a general one that can apply across other provisions of the contract.
The courts have generally favoured a narrow interpretation of express contractual obligations of good faith, and in cases where the duty relates to a specific provision, they have been hesitant to imply a wider overarching contractual duty.
However, whether a party can successfully rely on such a provision will depend to a great degree on the specific wording of the particular clause.The examples he cited as falling within the definition of a included joint venture agreements, franchise agreements and the type of long-term distributorship that was the subject of this dispute.Other examples, though not mentioned specifically, would also likely have included certain types of construction and engineering contracts.Furthermore, the contract was a long-term distributorship agreement which, the court noted, required the parties to communicate effectively and cooperate with each other in its performance.Mr Justice Leggatt classed this type of agreement as a and the case appeared to provide authority for the position that a general duty of good faith could be implied into these kinds of contracts.The agreement was and had not been drafted by lawyers.In the view of the court, it would be more difficult to imply a term into a detailed and professionally drafted document.The dispute concerned the levying of those deductions, and a question of whether the Trust had been entitled to terminate the contract on the basis that Compass had exceeded the number of service failure points permitted in any given six-month rolling period.Clause 3.5 of the contract, which contained an express duty to cooperate in good faith, read as follows: “The Trust and the Contractor will co-operate with each other in good faith and will take all reasonable action as is necessary for the efficient transmission of information and instructions and to enable the Trust or, as the case may be, any Beneficiary to derive the full benefit of the Contract.” , arguing that the good faith obligation in clause 3.5 should be construed widely so as to apply to the contractual provisions relating to performance level failures and/or that a general duty of good faith should be implied into the contract.In this particular case, the two obligations implied by the court were: (i) to not knowingly provide false information on which the other party would rely, and (ii) a fact-specific obligation not to undercut duty free prices.A duty of good faith was implied in both these respects.