To What Extent English Law Considers the Concept of Good Faith?

This research paper analyzes the extent to which English law considers the concept of good faith. It explores the historical perspective, application in present law system, and recent codification proposals.

Running head: TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD
FAITH?
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Name of the Student:
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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Acknowledgement
Sincere and heartfelt thanks to all of those who have helped, motivated and encouraged me for
conducting this study. I am indebted to my supervisor ……………………. whose guidance,
advice and patience have been immeasurable. My sincere thanks to all the staff and students,
whose continuous support have made this thesis possible.
I would like to thank the participants in the study: students, teachers and Local Education
Authorities, for the time and help given throughout. Without their participation, this research
would not have been possible. In this context, I am also thankful to them, whose research work
helped me to execute this paper well.
Finally, I thank my family, for whose mental support has helped me to complete this research
paper. Thank you

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Abstract
In this present research topic, the concept of good faith is being discussed in reference to
its relation to the English law mainly. The origin of this particular doctrine of good faith is also
analyzed in this article. In this article the main focus is on the application of doctrine of good
faith in the English law. It is analyzed in reference to some landmark cases where the scope,
application, extent and its limitation are discussed.
This research topic also discusses about the historical perspective of good faith in relation
to Roman law, medieval law and scenario of 19th century. Apart from this, its scope in
international law is also discussed. The article also deals with the current codification proposals
in respect of the principle of good faith.

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Table of Contents
Chapter 1: Introduction....................................................................................................................5
1.0 Overview....................................................................................................................................5
1.1 Background............................................................................................................................7
1.3 Research Aim.........................................................................................................................8
1.4 Research objective.................................................................................................................8
1.5 Research Questions................................................................................................................8
1.6 Structure of the dissertation...................................................................................................8
Chapter 2: Application of Good Faith Principle in the present day law system............................10
2.0 Overview..................................................................................................................................10
2.1 Good Faith as a Historical Perspective....................................................................................11
2.1.1 Roman Origins:.................................................................................................................11
2.2 Good Faith in Medieval Law...................................................................................................13
2.3 Good faith in 19th century........................................................................................................15
Chapter 3: Good Faith as a Standard of Behavior.........................................................................17
3.1 Overview..............................................................................................................................17

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
3.1.1 Good Faith in International Law.......................................................................................17
3.1.2 The United Nations Convention on Independent Guarantees and Stand-by Letters of
Credit.........................................................................................................................................18
3.2 Community Law:.................................................................................................................19
Chapter 4: Recent Codification Proposals.....................................................................................22
4.1 Good Faith as a Norm of Interpretation:..............................................................................22
4.2 Good Faith in Commercial Contracts..................................................................................23
Chapter 5: Good Faith in English Law..........................................................................................25
5.0 Overview..............................................................................................................................25
5.1 The Extent up to which The English Courts recognize the concept of Good Faith............25
5.2 Implied Duty on Contracting Parties...................................................................................30
5.2.1 Is there any universal implied duty on contracting parties?.......................................30
5.2.2 Can an express duty of good faith be imposed on parties to a contract?..........................31
6. Conclusion.................................................................................................................................32
References......................................................................................................................................33

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Chapter 1: Introduction
1.0 Overview
The topic of the research of this dissertation is whether the concept of good faith is
applicable to the English law. To understand it, it is important to analyze the concept of good
faith in detail. Good faith acts like a blanket clause in the domain of Civil law where the court
develops the standard of honest and fair behavior of the parties and the courts in the law of
duties, especially in the contract law, property law and to certain extent to the other fields of law
as held by ANSARI, ALI, and HOSEIN DEHGHANI1. The term good faith depicts that this term
runs through a number of concepts. Most of the European civil codes consists a provision of
general good faith. In addition to this, some codes have particular rules in respect of which
reference is made to the good faith concept as depicted by Sale2. Plus, there are many specific
rules in the respective codes where special applicability of good faith is observed.
In most of the systems of civil law, there lies a distinction between objective good faith
and subjective good faith as stated by Griffin, Patrick B. 3 According to Langford, Rosemary
Teele, and Ian Ramsa, subjective good faith is generally said to be defined as a subjective form
of state of mind; neither knowing nor having the need to know certain fact or event4. Its
relevance is generally observed in the property law. On the other hand, as per Barroso, Lucas
Abreu, and Laio Portes Sthel, in objective good faith, the concept usually refers to the rules and
1 ANSARI, ALI, and HOSEIN DEHGHANI. "GOOD FAITH IN PROCEDURE LAW." (2017): 109-133.
2 Sale, Hillary A. "Fiduciary Law and Good Faith." (2018).
3 Griffin, Patrick B. "The Notion of Good Faith in Common Law and Civil Law Contract Law." (2018).
4 Langford, Rosemary Teele, and Ian Ramsay. "Directors' Duty to Act in the Interests of the Company: Subjective or
Objective?." Journal of Business Law (2015): 173-182.

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
norms regulating the conduct of the parties in a contract where the contracting parties must act
according to or contrary to good faith5. The English law traditionally does not recognize the
concept of objective good faith. But, recently it has introduced it in its statute.
Objective good faith is the standard of behavior for the parties to a contract as
held by Tosato, Andrea6. According to McMeel, contract law with its essential criteria makes an
attempt to allocate risk and put forward the pre contractual, contractual and post contractual
obligations and risks in the way parties concerned would have fixed had they referred the issue
ex ante during the formation of the contract7. But because of the features of specific case, the
applicability of these legal rules can be said to impose unintentional and illogical results in the
individual cases. Though the black letter rule generally leads to expected results, but sometimes
it may result in the opposite direction. In those cases, the principle of good faith permits the court
to retract from the black letter rules of contract law. When the courts find that application and
result of the legal rule in a particular case to be unreasonable, it can depart from the good faith
principle. The courts have the discretion to apply flexibility to law if it is observed that
unforeseen conditions convert fairness into dishonesty. This allows adaptability to new situations
but saves the cost of transactions of the parties also. as the parties are aware of the fact that the
courts have the discretion to intervene and make suitable changes, the parties will be more
cautious while implementing contract, thus making it less expensive and defensive steps of the
parties to be less as discussed by Freire, Paula Vaz8.
5 Barroso, Lucas Abreu, and Laio Portes Sthel. "The Role of Objective Good Faith in Current Contract Law: For a
General Duty of Inter Partes Cooperation and Solidarity." J. Civ. L. Stud. 8 (2015): 187.
6 Tosato, Andrea. "Commercial agency and the duty to act in good faith." Oxford Journal of Legal Studies 36.3
(2016): 661-695.
7 McMeel, Gerard. "Foucault’s Pendulum: Text, Context and Good Faith in Contract Law." Current Legal
Problems 70.1 (2017): 365-397.
8 Freire, Paula Vaz. "Good Faith in contractual law: A “law and economics” perspective." (2016).

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
However, like everything has both positive and negative impacts, the principle of good
faith also has some loopholes and hence is subjected to criticism as mentioned by Mitchell,
Andrew D., and Tania Voon9. The main disadvantage is it gives ample scope of using discretion
by the court, which has the chance to be misused by importing ideology like totalitarian ideology
in the contract law or by allowing the judges to use their opinions excessively. The second one is
that it may encourage judicial activism when the judicial system creates the law in a proactive
manner such that it may replace the parliament. The third factor that can be considered in this
regard is that the principle of good faith can be used inappropriately to disperse the wealth from
the rich party to the poor by adopting the deep pocket approach. Finally, the court that interfere
into the contract may not as outsiders have the intimation for acting reliably in the interest of the
parties who are honest even when they have the best intention to do so.
1.1 Background
The concept of good faith has its origin in the Roman period as said by Visser, Daniel10.
Even today, writing of Cicero on good faith written almost 2000 years ago has same relevancy as
if it is written today. It is similar to the modern concept of opportunist behavior which has been
recently developed by the Economists. According to Hogg, Martin A, the notion ‘good faith’ has
a very wide meaning11. They depict all the honest aspects of a good conscience without
scrupulousness that may turn selflessness to sacrifice. The law tries to eliminate from contract,
dishonest transactions, frauds, misrepresentations, malice, and tricky action that under the
disguise of skill and prudence enjoys advantages of simplicity and ignorance.
9 Mitchell, Andrew D., and Tania Voon. "Conclusion: Good Faith and International Economic Law." (2015).
10 Visser, Daniel. "Anticipation in Roman Law." Handbook of Anticipation: Theoretical and Applied Aspects of the
Use of Future in Decision Making (2017): 1-18.
11 Hogg, Martin A. "The Implication of Terms-in-Fact: Good Faith, Contextualism, and Interpretation." Geo. Wash.
L. Rev. 85 (2017): 1660.

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
1.3 Research Aim
The objective of this study is to analyze whether the English law considers the concept of
good faith. In addition to this, it is also aimed to determine the extent to which English law
considers the good faith principle.
1.4 Research objective
The objectives of the present research study are:
 To find out whether the English law considers the concept of good faith.
 To find out the extent up to which the concept of good faith is considered by the English
law.
1.5 Research Questions
The following are the most significant research questions:
 Whether the concept of good faith is considered by the English law?
 To what extent, the English law considers the concept of good faith?
1.6 Structure of the dissertation
This research paper would be divided into the following chapters, namely:
a) Introduction and Objectives
b) Concept of good faith in present law system
c) Critical analysis of the present law system related to good faith
d) Proposals for reform of the present law system
e) The Law in United Kingdom relation to good faith

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
f) Conclusion
The first chapter deals with the introduction and objectives. It gives an idea of the
research topic in the precise manner. It also gives a sketch of the research overview, background,
questions, aims, objectives as well as the detailed structure of the paper.
The second chapter deals with the present day law system that applies the concept of
good faith. Apart from this, this particular chapter also deals with good faith as a historical
perspective, that is, origin of good faith and its presence in the historic period.
The third chapter provides provisions related to good faith as a standard of behavior in
international law and community law.
The fourth chapter deals with recent codification proposals in respect to good faith as a
rule of interpretation and the scope and application of good faith in contractual law.
The fifth chapter says about the presence of good faith in English law and the extent of its
application in it. It also focuses on implied duty on the parties to a contract. It also throws light
on the concept of universal implied duty on the contracting parties and whether an express duty
of good faith can be imposed upon such parties to the contract. Lastly, in the conclusion, it is
seen the application of the concept of good faith in the English law and its extent.

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Chapter 2: Application of Good Faith Principle in the present day law system
2.0 Overview
This chapter discusses about the concept of good faith and the extent of its application in
the present day law system. The terminology of the good faith has not been defined anywhere
clearly. Since it is a very wide and vague term, it is very difficult to give it a positive, precise and
unequivocal meaning. It is seen that the terms ‘good faith’ and ‘fairness’ are being used
synonymously and interchangeably. An analysis made by Kavalski, Emilian., of the common
Acquis Communautaire and Acquis International reveals that these two terms are
interchangeable12. However, their difference is observed in the comparative law which makes an
attempt to distinguish the two terms. From this point of view, it is seen that they cannot be used
as synonyms. From the reading of Acquis International and Acquis Communautaire together
with comparative law, it is clear that the expressions ‘good faith and fair dealing’ are just
translated to ‘good faith’ in the French law.
The study of the term ‘good faith’ shows that this notion appears in a number of concepts
as declared by Sale, Hillary A13. Firstly, it appears that a number of system acknowledges that
the concept of good faith applies to the law of obligations usually and not only to the contract
law. Besides this, good faith is sometimes applicable to private law too. It is observed that it is
also found in the family law, property law and the laws operating in the field of wills and gifts.
The fact that it is applicable in so many fields is not confined to the French, Belgian or even
Quebec law. In Netherlands, for instance, good faith has application in laws of inheritance,
12Kavalski, Emilian. "The normative dimension of EU-China relations: Acquis Communautaire vs
Guanxi." Routledge Handbook on EU-China Relations. London: Routledge (2018).
13 Sale, Hillary A. "Fiduciary Law and Good Faith." (2018).

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
company laws, property law, bankruptcy law and even in private international law. Thus from
this, it can be said that good faith applies to laws affecting property rights. Some legal systems,
for example Germany, have gone beyond by overcoming the division between public and private
law systems. According to Ostroukh, Asya, civil codes of Quebec and of Switzerland can be
cited as examples as some of the introductory articles denote that rights of each person will apply
as per the condition of good faith14.
Moreover, the achievement of the term good faith echoes in the developments of the
contemporary European, Community, international and national law. In order to predict the
presence and application of good faith, it is important to retrace the origin of the concept so as to
understand the difficulties associated with it.
2.1 Good Faith as a Historical Perspective
As per Young, Simon, there are three historical periods consisting of Roman law,
medieval law and the XIX century, the period of codification15.
2.1.1 Roman Origins:
According to Feinman, Jay M., the notion of good faith was introduced in the Roman
contract law16. However, as per Domingo, Rafael, it was not possible without the inspiration
from the Greeks17. The works produced by the Stiocs PYTHAGORAS and ZENO marked the
origin of the notions of justice and equity.
14 Ostroukh, Asya. Reception of the French Civil Code in Francophone Switzerland, Louisiana, and Quebec: a
socio-legal study. Diss. University of Edinburgh, 2017.
15 Young, Simon. Postwar: A history of Europe since 1945. Macat Library, 2017.
16 Feinman, Jay M. "The Duty of Good Faith: A Perspective on Contemporary Contract Law." Hastings Law
Journal 66.937 (2015).
17 Domingo, Rafael. Roman law: an introduction. Routledge, 2018.

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
As per Martin, Samuel, CICERO gave us the most complete definition of good faith18.
According to CICERO, the words ‘good faith’ has a very wide meaning. The words depict all the
honest values of the good conscience, without needing the carefulness that may turn selflessness
into sacrifice as per McMeel, Gerard19. The law repeals dishonest dealings, fraud, perfidious
simulations, dissimulations and malice from the contracts; all these under the disguise of skill
and diligence take the benefits of ignorance, simplicity and credibility.
One of the interesting particulars of the Roman procedure is its use of the formula system
as per Morgan, Teresa20. The praetor, the magistrate who dealt with the citizens and listened to
their pleadings, allowed or forbade any course of action, verified the allegations made and
brought the case before a judge, gave approvals to those cases only when are in specific format
of structure. However, as per Abubakar, Yusuf Sani, Ahamad Faosiy Ogunbado, and
Mpawenimana Abdallah Saidi, there were specific formulas due to which only specific rights can
be availed21. These contracts of good faith were concerned with the consensual contracts mainly,
that differentiated themselves from the scope of the formal contracts because of their conditions
of validity and due to the fact that they were all done in good faith; thus it can be said that they
came largely under the ambit of the broad power of interpretation of the judge.
According to Perry, Christina, the practical usage of the term of good faith in the Roman
law is usually illustrated by the classic example of the contract of sale due to the importance
attached to the duty of the seller to inform the buyer in respect of any hidden defects guarantee
18 Martin, Samuel. "The Evolution of Good Faith in Western Contract Law." (2018).
19 McMeel, Gerard. "Foucault’s Pendulum: Text, Context and Good Faith in Contract Law." Current Legal
Problems 70.1 (2017): 365-397.
20 Morgan, Teresa. Roman faith and Christian faith: Pistis and fides in the early roman empire and early Churches .
OUP Oxford, 2015.
21 Abubakar, Yusuf Sani, Ahamad Faosiy Ogunbado, and Mpawenimana Abdallah Saidi. "Doctrine of Good Faith in
Contracts: A Comparison between Conventional and Islamic Laws." Indian Journal of Public Health Research &
Development 9.11 (2018): 1534-1540.

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
and the guaranty against attacks on the rights of property22. Other examples are the theory of
abuse of the rights, recognition of the principle of rebus sics stantibus and others.
As per Priyono, Ery Agus, R. Benny Riyanto, and FX Joko Priyono, a split in the
terminology of bonae fidel contractus appeared in the fourth and fifth century A.D. Contracts of
good faith were either completed by ignoring any unfavorable element or were concluded with
no constraints and deceit and thus were saved from any attack23.
However, as held by Gordley, James, if the Roman law reserved the use of the term of
bona fides in respect of contract law and the procedures thereof, it is found that this need was, on
one hand, extended to all of the jus commune, the law which is common to all Christian
European countries and became closer to aequitas on the other24.
2.2 Good Faith in Medieval Law
From the 12th century A.D, the contracts of good faith became the rule rather than the
exception as they were present in the Roman law. The contract was concluded by exchanging the
consent only. But as said by Uçaryılmaz, Talya Şans, the gradual passage from the principle of
ex nudo pacto action non nascitur ( no right of action is created from a bare pact) to that of
consesu obligat (consent alone suffices) occurred slowly and apparently with great difficulty25. It
is found that the consensualism was the only recognized fact in the general principle of the 19th
century.
22 Perry, Christina. "Good Faith in English and US Contract Law: Divergent Theories, Practical Similarities." Bus. L.
Int'l 17 (2016): 27.
23Priyono, Ery Agus, R. Benny Riyanto, and FX Joko Priyono. "The Function of Good Faith Principle in the
Application of Feedom Principle in Franchise Contract." IOP Conference Series: Earth and Environmental Science.
Vol. 175. No. 1. IOP Publishing, 2018.
24 Gordley, James. "2. In defense of Roman contract law." Comparative Contract Law (2017): 19.
25 Uçaryılmaz, Talya Şans. The principle of bona fides from Roman law to contemporary law. Diss. Bilkent
University, 2018.

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
As held by du Plessis, Jacques, it is observed that it is during this period, the concept of
good faith became a general principle of both international and national commerce26. This time
period also depicts the generalization of the principle of exception doli, which could later
become the foundation of the theory of the abuse of right.
In addition to the development and growth of the concept of good faith, as said by
Ormrod, W. Mark, medieval law also witnessed the rapprochement between bona fides (good
faith) and aequitas (equity)27. In regard to these, the German and the French Romanists adopt the
opposing positions. The German Romanists considered that these terms were different from one
another before treating them later as the same after the Byzantine period that continues from 476
to 1453 AD. However, as opposed by Kolb, Robert, the French authors considered that good
faith as just a modification of equity. Constantine even went far to declare this theory as the
essential and significant of the entire Roman legal system28. Later on, Justinian made the jus
aequuum, the supreme source of law.
In practice, the functionality of good faith and of equity greatly overlapped each other.
This overlap was mainly caused due to the enlargement of the scope of the term good faith which
was given a general application, such that on the practical level, confusion with aequitas
occurred. This historical confusion thus allows a better understanding of few contemporary
problems, most significantly in the wordings of articles 1134-3 and 1135 of the French Civil
Code and in the similar articles of other civil codes. However, as argued by Aryan, Shahram, and
Bagher Mirabbasi, this confusion can be used as a justification for the differentiation of
26 du Plessis, Jacques. "Giving practical effect to good faith in the law of contract." Stellenbosch Law Review29.3
(2018): 379-419.
27 Ormrod, W. Mark. "Pardon, Parliament and Political Performance in Later Medieval England." Prowess, Piety,
and Public Order in Medieval Society: Studies in Honor of Richard W. Kaeuper (2017): 301.
28 Kolb, Robert. Good faith in international law. Bloomsbury Publishing, 2017.

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
terminologies that appears in the Dutch law, inspired by the German law which, in its latest
reform in Civil Code (BW), chose to substitute ‘good faith’ with ‘reason and equity’29.
If the Roman and the Medieval law, as proposed Alpa, Guido, contribute greatly to the
understanding and analysis of the meaning that can be attached to good faith, the period of
Napoleonic codification makes clear the meaning and the purpose of the good faith in the
contemporary law30.
2.3 Good faith in 19th century
Very little information is found in the period of Napoleonic codification in relation to the
principle of good faith. But, few facts can be discerned, especially the fact that good faith
originates from the concept of natural faith as mentioned by ANSARI, ALI, and HOSEIN
DEHGHANI31. It also seems that it was recognized in the commercial transactions too. However
if the justification of inserting good faith in the French Civil Code of 1804 was served by the
natural law, this authority was undermined in the period of 19th century mainly by the Positivist
doctrine and the historical school. Positivism finds its origin in the works of the Friedrich von
Savigny’s contemporaries. This school made a search for all the law sources in history. Having
noticed the significance of these at the start of the 20th century, it will be surprising to consider
that the good faith was established in 1900.
As said by Chiassoni, Pierluigi., the school of Begriffsjurisprudenz held a contradictory
and opposing view from that of the School of Frerechtsbewegung32. The forger achieved the
29 Aryan, Shahram, and Bagher Mirabbasi. "The Good Faith Principle and Its Consequences in Pre-Contractual
Period: A Comparative Study on English and French Law." J. Pol. & L. 9 (2016): 232.
30 Alpa, Guido. "European Private Law, Conceptions and Definitions of Contract." European Business Law
Review 27.6 (2016): 709-718.
31 ANSARI, ALI, and HOSEIN DEHGHANI. "GOOD FAITH IN PROCEDURE LAW." (2017): 109-133.
32 Chiassoni, Pierluigi. "The Age of Analysis: Logical Empiricism, Ordinary Language, and the Simple Truth of the
Matter." A Treatise of Legal Philosophy and General Jurisprudence. Springer, Dordrecht, 2016. 1715-1732.

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
recognition of the legal order based on the precise and abstract concepts to avoid the arbitrary
use of discretion by the judge. On the other hand, the latter started through the works of Jhering
with an aim to target to achieve the relaxation of law and its interpretation also. This school is
particularly significant for developing the completive as well as interpretive judicial power by
renewing the term good faith.
Good faith thus as interpreted by Chen, Jason, became a written rule that has observed
tremendous and huge development in a number of national systems in spite of the fact that it has
no particular definitions33. It has neither any consensus in regard to the exact nature of the good
faith. This notional as well as terminological imperfection unavoidably has affected the function
fulfilled by good faith in the contemporary law as put forwarded by Feinman, Jay M34.
33 Chen, Jason. "Should English Contract Law Adopt a General Duty to Negotiate in Good Faith." BLR (2017): 18.
34 Feinman, Jay M. "The Duty of Good Faith: A Perspective on Contemporary Contract Law." Hastings Law
Journal 66.937 (2015).

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Chapter 3: Good Faith as a Standard of Behavior
3.1 Overview
The term ‘good faith’ instead of considering it as univocal and unambiguous, is often
regarded as a standard of behavior, that can sometimes denotes a particular obligation. This
depicts the proper usage of the expressions ‘duty of good faith’ as well as obligation of good
faith’.
As indicated by Karimi, Mohammad, Javad Kashani, and Dawood Nassiran. ,the
principle of good faith is occasionally observed as a basis of the lex mercatoria, thus can be
directly applied to international contracts35. Reference to good faith as a standard of behavior can
be found in community law as well as international law.
3.1.1 Good Faith in International Law
Among the several international sources that are applied to a contract, the term of good
faith is mainly found in the United Nations Convention on Contracts for the International Sale of
Goods, 11th April in the year of 1980, where the term is used extensively. But it contains an
inconclusive status indicating that the Convention has got no provision that imposes obligation
of good faith in relation to the implementation of the contract. Although Article 7(1) states that
the interpretation of the Convention good faith must prevail and it must not impose a duty of
good faith on the parties.
35 Karimi, Mohammad, Javad Kashani, and Dawood Nassiran. "'Lex Mercatoria'as an Independent Legal
System." Available at SSRN 2857888 (2016).

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
This article serves as a compromise between the delegates belonging to the common law
countries who oppose the establishment of the duty of good faith and those of civil law countries
that favors it as argued by Berger, Klaus Peter, and Thomas Arntz36.
The fact that, without expressly mentioning it, the notion of good faith has it application
and usage in several numbers of articles in the Convention. For instance, article 29(2) declares
that a contract in writing that has a provision containing amendment or termination by agreement
to be in writing may not be otherwise terminated or modified by agreement. But a party may be
prevented by his behavior and conduct from asserting to the extent that the other party has
believed and worked on that conduct.
Again in article 35(3), the seller will not be held liable under the provisions of sub
paragraphs (a) - (d) of the preceding paragraph for any absence of conformity of the goods if at
the time of the conclusion of the contract the buyer knew or could not have been not aware of
such absence of conformity. An analogy can be made between articles 38, 40, 44 and this
particular article.
Article 77 is related to the duty to diminish the loss can also be considered as an
expression of the good faith among the parties.
3.1.2 The United Nations Convention on Independent Guarantees and Stand-by
Letters of Credit
Article 14 of the UN Convention entitled as the ‘Standard of Conduct and Liability of
guarantor or the issuer’ mentions in its 1st paragraph that the issuer or the guarantor must act in
good faith and exercise reasonable care giving due regard to the accepted standards of the
36Berger, Klaus Peter, and Thomas Arntz. "Good faith as a ‘general organising principle’of the common
law." Arbitration International 32.1 (2016): 167-178.

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TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
international practice as held by Gillette, Clayton P., and Steven D. Walt37. The next paragraph
denotes that the issuer or the guarantor may not be excluded from its responsibility due to its
failure to act in good faith or for any gross negligent behavior or conduct. On the other hand,
Article 19 makes it clear that this standard of behavior by listing conditions and situations where
the guarantor or issuer can depend on a right to withhold payment.
3.2 Community Law:
Good faith is a very important part of European institutions. Article 10 of the
aforementioned Treaty on European Union (ex- article 5 of TEC) imposes on the Member States
a negative duty to abstain from any measure which can cause threat to achieve the objectives
given in the Treaty as well as a two fold positive obligation to take all the appropriate measures
to fulfill the obligations given under the Treaty and promote the achievement of the tasks of the
Community.
Initially Article 10 was discussed as a mere principle of interpretation the main objective
was to introduce the particular duties inherent to the Treaty. Subsequently, today any
infringement of Article 10 is regarded as the breach of the obligations laid in Treaty, capable of
leading to proceedings of infringement under Article 226 TEU as per Geiger, Rudolf, et al38. This
is also the case whenever the duty to inform the Commission, imposed on Member States by
article 10 EC is breached; the court regards it as the breach of obligation of the cooperation,
imposed by article 5 of the Treaty, for a Member State to neglect in providing the Commission
with requested information.
37Gillette, Clayton P., and Steven D. Walt. The UN Convention on contracts for the international sale of goods:
theory and practice. Cambridge University Press, 2016.
38 Geiger, Rudolf, et al. "European Union Treaties." A Commentary. Treaty on European Union. Treaty on the
Functioning of the European Union (CH BECK Hart 2015) (2015).

21
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Apart from the Treaty provisions, Secondary legislation of the Community refers to good
faith and to fairness with the two concepts often linked together. This trend is clearly illuminated
by the Council Directive 93/13/EEC of 5th April of the year 1993 on unfair terms in the consumer
contracts which is given in Article 3 as per Wilson, Therese39. The concept of ‘good faith’ as it is
understood under the above mentioned Directive is clarified by the Preamble’s 17th recital. As
pointed out by Griffin, Patrick B, it appears that when taken literally, the expression ‘good faith’
is used in its subjective dimension as a condition that must be taken into account apart from the
objective need of a significant imbalance40.
However as mentioned by Feinman, Jay M, it must be noted that when the texts are
implemented by the Member States, the national legislators are mainly bothered with the
subjective approach that may lead to a weakening of the measures taken against unfair terms of
contract with an aim to prevent any risk41. This was the case in relation to article L132-1 of the
French Consumer Code.
Even when the notion ‘good faith’ is not clearly used, the word ‘fairness’ sometimes
appears in the secondary legislation of Directive 97/7/EC of 20th May in the year of 1997 to give
protection to the consumers in distance contracts given in its article 4.2. Using similar wording,
Directive 86/653/EEC of 18th December 1986 on coordinating the laws of the Member States in
relation to self employed agents is given in the article 3. In the same way, Directive 2002/65/EC
of the 23rd September in the year of 2002 is concerned with the distance marketing of consumer
financial services provided in article 3.2. Finally, more recently, directive 2005/29/EC of the 11th
39 Wilson, Therese. "The Challenges of Good Faith in Contract Law Codification." Codifying Contract Law.
Routledge, 2016. 57-75.
40 Griffin, Patrick B. "The Notion of Good Faith in Common Law and Civil Law Contract Law." (2018).
41 Feinman, Jay M. "The Duty of Good Faith: A Perspective on Contemporary Contract Law." Hastings Law
Journal 66.937 (2015).

22
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
May in 2005 concerned with unfair practices of ‘business to consumer commercial’ in the
internal market, denotes that in article 2, the professional diligence’ under the Directive means
the ‘standard of special care and skill’ which a trader may in general is expected to exercise to
his consumers. Those who remarked on this Directive raised the issue of the definition that is to
be given to the concepts of good faith and loyalty in this context. They mentioned that when the
concept of loyalty or fairness is found to be similar to the civil systems of law, that include
French law, it is not considering the free play of the market forces as encouraged by the EU.
Though English law has inspired the economic approach adopted by directive 2005/29, the
concept of good faith is found to be unfamiliar to the jurists of Britain as per Aryan, Shahram,
and Bagher Mirabbas42.
Thus from the discussion made by Wright, Andrew McCanse, it is seen from the
investigation of the Acquis including Acquis Communautaire, that the principle of good faith
regarded as a standard of behavior is widely used43. It is however important to denote that the
recent remarks and writings made by the academics on the European contract law depicts that
this notion of good faith must be given an essential role in the laws of contract as per Přibáň,
Jiří44.
42 Aryan, Shahram, and Bagher Mirabbasi. "The Good Faith Principle and Its Consequences in Pre-Contractual
Period: A Comparative Study on English and French Law." J. Pol. & L. 9 (2016): 232.
43 Wright, Andrew McCanse. "Constitutional Good Faith." (2018).
44Přibáň, Jiří. Legal symbolism: on law, time and European identity. Routledge, 2016.

23
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Chapter 4: Recent Codification Proposals
Though the concept of good faith is quite old and has its presence in different categories
of laws, it must be noted that the concept does not appear in several international or European
texts. It is also not found in some of the international conventions as mentioned by Bridge,
Michael45. Moreover, good faith has not been even mentioned in the Community text laws as
rightly pointed by Riekmann, Sonja Puntscher, and Doris Wydra46. However, it is present in a
large number of texts and its scope is gradually increasing and growing more in the light of the
recent proposals in codification. In the proposal mentioned below, good faith appears as a norm
of interpretation, sometimes as a forgivable and mistaken belief and sometimes as a source of
obligations.
4.1 Good Faith as a Norm of Interpretation:
The expression good faith frequently appears in relation to the interpretation of
legislation. In this situation, it is not given any particular definition. It appears to be understood
as conflicting with a strict and narrow interpretation of texts. The interpretation principle is
applicable to all the international treaties, to rules related to contracts and as a principle of
contractual interpretation.
In the public international law as held by Linderfalk, Ulf., good faith forms a
fundamental principle. Article 26 of the Vienna Convention dealing with Law of Treaties, signed
on 23rd May 1969 provides that every treaty in force must be binding on the parties involved in it
and they must perform it in good faith. Article 31 on the other hand, makes it clear that a treaty
45 Bridge, Michael. "Good faith, the common law, and the CISG." Uniform Law Review 22.1 (2017): 98-115.
46 Riekmann, Sonja Puntscher, and Doris Wydra. "‘Obligations of good faith’: on the difficulties of building US-
style EU federalism." Contemporary Politics 21.2 (2015): 201-219.

24
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
must be interpreted in good faith according to the general meaning of the treaty terms in respect
of its purpose and object as said by Kolb, Robert47.
This concept has been repeated and consolidated by the old article 5 of the EEC Treaty,
now as the article 10 of the European Union Treaty as mentioned by Fijnaut, Cyrille48. The term
good faith however is not found in the text. However, it is admitted that the text can be read as
the substitute. From this, the text provides the strengthening of the pre-existing obligation and is
a method of systematic interpretation of the community legislation. Thus it is seen that its role
goes beyond the ambit of interpretation.
Apart from this application to treaties, good faith plays a greater role as a regulator where
the above mentioned international treaties attempt to give good faith its absolute importance in
the international treaties49. The Vienna Convention held in 11th April, 1980 on the international
sale of goods elaborates this condition perfectly. Similar observation is found in the article 5 of
the UNCITRAL Convention on stand-by letters of credit and independent guarantees of 1995.
Another same type of expression is found in the UNCITRAL Convention on the assignment of
receivables in international trade (Article 7) and in the UNIDROIT Conventions of 28th May of
1988 related to international factoring and international financial leasing, articles 4 and 6
respectively.
4.2 Good Faith in Commercial Contracts
The principle that a contract has to be interpreted as per the principle of good faith
pervades all the law in relation to commercial contracts. It has grown considerably in the frame
47 Linderfalk, Ulf. "Good Faith and the Exercise of Treaty-Based Discretionary Powers." Available at SSRN
2783644 (2016).
48 Fijnaut, Cyrille. "Transnational organized crime and institutional reform in the European Union: The case of
judicial cooperation." The Containment of Organised Crime and Terrorism. Brill Nijhoff, 2016. 461-483.
49 Kolb, Robert. Good faith in international law. Bloomsbury Publishing, 2017.

25
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
of lex mercatoria to such extent that it has become one of the fundamental principles as said by
Karimi, Mohammad, Javad Kashani, and Dawood Nassiran50. Moreover as put forwarded by
Garcia, Frank J., et al.,the need of good faith arises from various international arbitration awards
which create a more general principle as per the principle by which good faith is applied on
arguments51. In this regard, it is seen that good faith not only provides a guideline to interpret the
intention of the parties but also provides a mechanism that affects the terms, conditions and
content of contract. The judges are ready to travel beyond the intention of the parties, they
encourage by means of different academics and by several international texts to use good faith as
a real criterion of interpretation as a source of duty even.
50Karimi, Mohammad, Javad Kashani, and Dawood Nassiran. "'Lex Mercatoria'as an Independent Legal
System." Available at SSRN 2857888 (2016).
51 Garcia, Frank J., et al. "TPF and ISDS: A Public Comment on the Draft Report of the ICCA/Queen Mary Task
Force on Third Party Funding in International Arbitration." (2017).

26
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Chapter 5: Good Faith in English Law
5.0 Overview
The English law like many other civil law systems does not have any general doctrine of
good faith as depicted by Chen, Jason52. As per Martin, Samuel, many jurisdictions have
included in their civil codes explicitly the principles of good faith in their commercial dealings53.
In that relation, a duty to act in good faith for creating and performing any contract becomes an
express obligation on all parties. It is also to be understood that the identification of the general
doctrine of good faith is not restricted to the jurisdictions of civil law only as held by Knight,
Simon, et al54. For instance, according to Parkinson, Patrick, and Judy Cashmore, Supreme Court
of Canada recently identified a new common law obligation of honest execution and the courts in
Australia have implied broad duties of good faith in the field of commercial contract5556.
5.1 The Extent up to which The English Courts recognize the concept of Good Faith
The English law does not presently identify a universal implied duty on parties to a
contract to perform their duties in good faith as said by Hiscock, Mary57. This is however not
seen in many countries like France, Germany, the US, Australia where the overriding principles
of good faith are openly recognized. As a result of which, in these countries, the parties to the
contract are obliged to execute their performances in good faith.
52 Chen, Jason. "Should English Contract Law Adopt a General Duty to Negotiate in Good Faith." BLR (2017): 18.
53 Martin, Samuel. "The Evolution of Good Faith in Western Contract Law." (2018).
54 Knight, Simon, et al. "Designing Academic Writing Analytics for Civil Law Student Self-
Assessment." International Journal of Artificial Intelligence in Education (2018).
55 Hunt, Chris DL. "Good Faith Performance in Canadian Contract Law." The Cambridge Law Journal 74.1 (2015):
4-7.
56 Parkinson, Patrick, and Judy Cashmore. "Reforming relocation law: An evidence‐based approach." Family Court
Review 53.1 (2015): 23-39.
57 Hiscock, Mary. "The Enforceability of Promises to Negotiate in Good Faith: Rethinking Traditional Common
Law Attitudes." Transnational Commercial and Consumer Law. Springer, Singapore, 2018. 175-186.

27
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
Few recent cases have rekindled the discussion that whether the English law recognizes
the concept of good faith. It cannot be denied that the English have reiterated repeatedly that the
English courts do not identify or use the principle of good faith as held by Tang, Samantha S58.
The opposition to such recognition can be seen in the case of Walford v Miles [1992] 2 AC 128
(“Walford”). In this case, the courts refused to use a term such that the parties may continue to
negotiate in good faith. The court held that a liability to negotiate in good faith cannot be used in
practice, the reason being repellent, inconsistent and contradicting with the parties to negotiation.
It was due to this repugnance and inconsistency that result into uncertainty as to what a duty of
good faith used.
The historical reluctance of the courts to apply the general duty of good faith is due to the
assumption that if applied, contractual certainty will be affected. Instead of this, the English
Courts have preferred to form “piecemeal solutions in response to demonstrate the problems of
unfairness. It was observed by Lord Justice Bingham in the case of Interfoto Picture Library Ltd
v Stiletto Visual Programmes Ltd59. There lies no accepted definition of this concept in the
English Law but in the same decision Lord Justice Bingham defined good faith as the being most
perfectly regarded by colloquialisms like ‘coming clean’, ‘playing fair’ and others. Finally, he
concluded it as an essence of the principle of fair and open transaction.
When the terms are not properly indicated in the contract agreement, the parties will have
the option of argument about what a duty of good faith in a particular aspect means as argued by
Bridge, Michael60. In situations, where the parties have included good faith duties expressly in
their agreement of contract, the general and the most favorable approach is that the courts will
58 Tang, Samantha S. "Corporate avengers need not be angels: rethinking good faith in the derivative
action." Journal of Corporate Law Studies 16.2 (2016): 471-491.
59 of Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd. [1989] QB 433.
60 Bridge, Michael. "Good faith, the common law, and the CISG." Uniform Law Review 22.1 (2017): 98-115.

28
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
try to give effect to those express provisions which will relate to the actual execution of a
specific duty. But, as held by Feinman, Jay M.,whether a party can rely on such provisions of
the contract will depend on the specific wording of that particular clause61. Then, the usual
principles of the contractual interpretation will be applied.
There are many cases where an express clause or condition is found that incorporates the
duty of good faith as stated by Eggers, Peter MacDonald, and Simon Picken62. The parties in
those cases seek to depend on the clause. They even argued that such duty is of general type
which s applicable to other provisions of contract. As said by Hogg, Martin A, the courts have in
general favored a restricted and narrow interpretation of the contractual liabilities that are
expressed, of good faith, and in cases where such duty refers to a specific provision, they are
found to be hesitant to apply an overarching and wide duty in contracts63.
In this regard, few cases and their judgments have been discussed. The judgment of the
case of Yam Seng Pte Ltd v International Trade Corporation Ltd64, attempted to raise the
expectations that the courts were open to accept the duty of good faith that is being applied
commonly in the commercial agreements of contract as found in writings of Lee, Hock Beng65.
Several case after this are found to follow the path led in the Yam Sem case. However, the Court
of Appeal has overruled the MSC decision at first instance in the above mentioned case. It has
resulted in the reverting to the traditional position where the English Contract law does not
consider the duty of good faith in general.
61 Feinman, Jay M. "The Duty of Good Faith: A Perspective on Contemporary Contract Law." Hastings Law
Journal 66.937 (2015).
62 Eggers, Peter MacDonald, and Simon Picken. "The post-contractual duty of good faith." Good Faith and
Insurance Contracts. Informa Law from Routledge, 2017. 387-412.
63 Hogg, Martin A. "The Implication of Terms-in-Fact: Good Faith, Contextualism, and Interpretation." Geo. Wash.
L. Rev. 85 (2017): 1660.
64 Yam Seng Pte Ltd v International Trade Corporation Ltd [2013] EWHC 111 (QB).
65 Lee, Hock Beng. "The Yam Seng case and its aftermath: Possible directions of good faith in contract law." (2016).

29
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
As discussed above, in 2013, the issue whether the obligation of good faith can be
applied in contract was analyzed in the case Yam Seng Pte Ltd v International Trade
Corporation Ltd. mentioned above where Mr Justice Legatta adopted a comparatively broader
approach in respect of the situations where the duty of good faith could be applied n the ordinary
contracts of commercial nature as illustrated by Lee, Hock Beng.66. In the judgment given by
him, he recognized that the English hostility traditionally to the doctrine of good faith while
performing the contracts can be misplaced as denoted by Rowan, Solène67.
The reason behind it was that a good faith obligation can be implied by referring to the
established approach for implication of the terms into a contract as per Widdows, Kelvin68. In
this case, either such term was very obvious or it is required and important to give business
efficiency to the contract. The dispute appeared was out of a long term international agreement
among the parties under which ITC granted Yam Seng exclusive rights to distribute branded
fragrances. The relation broke apart and Yam Seng argued that breach of contract was made by
ITC and held that duty of good faith must be applied in the agreement of the contract.
Yam Seng argued that ITC failed to act with the implied duty of good faith in prejudcing
the sale of Yam Seng by offering same products of domestic sale below the duty- free prices
which it was allowed to offer. Moreover, it argued that ITC had encouraged Yam Seng to bear
marketing expenses for items that ITC was not willing to supple. Moreover, ITC made false
information on which Yam Seng depended that cause the detriment.
66 Lee, Hock Beng. "The Yam Seng case and its aftermath: Possible directions of good faith in contract law." (2016).
67 Rowan, Solène. "The new French law of contract." International & Comparative Law Quarterly 66.4 (2017): 805-
831.
68 Widdows, Kelvin. "What is an agreement in international law?." The Law of Treaties. Routledge, 2017. 73-105.

30
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
In this particular case, two duties were implied by courts. They are; firstly, the duty to
provide false information though unknowingly on which the other party would depend and
secondly, a specific duty not to reduce duty free prices.
The duty of good faith was implied in these aspects. However, as held by Eggers, Peter
MacDonald, and Simon Picken, the first duty was in contradiction to the usual standard of
commercial dealing and the second duty was implied in the agreement of contract between the
parties as a matter of facts69. As indicated by Rowan, Solène, there were certain conditions
particular to this case that led the court to infer that an obligation of good faith can be implied.
The agreement was “skeletal” and was not drafted by the lawyers70.
However, the decision of the Mid Essex Hospital Services NHS Trust v Compass Group
UK and Ireland Ltd71 and that of Court of Appeal judgment in MSC Mediterranean Shipping
Company S.A. v Cottonex Anstalt72, if followed, Yam Seng must be treated with care and caution.
In another recent case of Globe Motors Inc v TRW Lucas Variety Electric Steering Ltd73,
the Court of Appeal did not recognize that the concept of relational contracts is to be subjected to
good faith. Instead, the court held that the concept of good faith will only be allowed to be
implied where the language of the agreement of the contract allows it.
Immediately after the decision of Yam Seng, the court of appeal took a much narrow and
restrictive approach in the case of Mid Essex Hospital Services NHS Trust v Compass Group UK
69Eggers, Peter MacDonald, and Simon Picken. "The post-contractual duty of good faith." Good Faith and
Insurance Contracts. Informa Law from Routledge, 2017. 387-412.
70 Rowan, Solène. "The new French law of contract." International & Comparative Law Quarterly 66.4 (2017): 805-
831.
71 Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (trading as Medirest) [2013]
EWCA Civ 200.
72 MSC Mediterranean Shipping Company S.A. v Cottonex Anstalt [2016] EWCA Civ 789.
73 Globe Motors Inc v TRW Lucas Variety Electric Steering Ltd [2016] EWCA Civ 396.

31
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
and Ireland Ltd.74 where, the court made it clear that the duty to act in good faith given under a
particular provision does not extend to all the conducts under such contract.
In a more recent case MSC Mediterranean Shipping Company S.A. v Cottonex Anstalt,
the approach taken by the Court of Appeal makes it clear that there is no general and common
principle of good faith in English law and it curtails the authority that began in the case of Yam
Seng.
5.2 Implied Duty on Contracting Parties
5.2.1 Is there any universal implied duty on contracting parties?
The common question that appears in this context is that is there any universal implied duty
imposed on the parties to a contract to act in good faith. As per Perry, Christina, the direct
answer to this is a big no75. The English courts have been found to be reluctant and casual to
recognize it. The reason behind it is that it creates uncertainty greatly in deciding what the actual
duty and liability can be as the matter is vague and subjective. According to Carter, J. W., and
Wayne Courtney, the principle of implied good faith also goes against the freedom of contract as
why to interfere when the parties to the contract have already negotiated the terms of the
agreement76. Instead of enforcing the broad principles of good faith in the contracts, the English
law has developed by forming particular solutions while dealing with and solving particular
problems. In a recent case, the court decided that the duty of good faith can be implied in a
contract but only a term depending on the predetermined intention of its parties.
74 Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (trading as Medirest) [2013]
EWCA Civ 200.
75 Perry, Christina. "Good Faith in English and US Contract Law: Divergent Theories, Practical Similarities." Bus. L.
Int'l 17 (2016): 27.
76 Carter, J. W., and Wayne Courtney. "Good faith in contracts: is there an implied promise to act honestly?." The
Cambridge Law Journal 75.3 (2016): 608-619.

32
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
5.2.2 Can an express duty of good faith be imposed on parties to a contract?
As per McMeel, Gerard, many contracts entered for commercial purpose, specially
require the parties to it to perform particular obligation or exercise any specific discretion by
acting in good faith77. Though it is less common but it is not impossible to impose an express
duty to perform the entire contract in good faith by using terms expressly. According to Wilson,
Therese, any express term in the agreement of the contract has to be interpreted carefully in
context of the whole contract and by referring to the commercial relation between the parties78.
In this aspect, the aim and purpose of the contract must be referred too as held by Tapia,
Matthew.
77 McMeel, Gerard. "Foucault’s Pendulum: Text, Context and Good Faith in Contract Law." Current Legal
Problems 70.1 (2017): 365-397.
78 Wilson, Therese. "The Challenges of Good Faith in Contract Law Codification." Codifying Contract Law.
Routledge, 2016. 57-75.

33
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
6. Conclusion
As seen in the above discussion, there is no generally applicable definition of good faith
in English law. It is very clear that content of the duty of good faith is being strongly conditioned
by its context. There may be presence of honesty put into context; the meaning of the phrase
however will call for further discussion and elaboration.
In cases, where it is observed that a party contends that an implied term is based on the
concept of good faith and is applicable to the particular contract, the term will has to meet the
strict implication tests as observed in the case of Marks & Spencer Plc v BNP Paribas Securities
Services Trust Company (Jersey) Ltd [2015] UKSC 72. In practice however it means that a term
or phrase of this type would be unlikely to be implied unless a party could properly show that
such contract would lack practical or commercial coherence in the absence of it.
In the light of the above discussion and elaboration, it is seen that if any party wants to
depend on the obligation of good faith in a contract, it must provide it expressly. When a party
chooses it, it is significant that the scope, substance and usage of such obligation must be made
clear in the agreement of such contract generally. It is to be done to avoid any ambiguity and
misinterpretation as to what it refers or what it means or to which provisions of the contract it
applies. Certainty is the main tool and key to clear any confusion. However, parties must keep in
mind that good faith will not overrule and trump an absolute right of the contract.

34
TO WHAT EXTENT ENGLISH LAW CONSIDER THE CONCEPT OF GOOD FAITH?
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