GOOD FAITH PERFORMANCE IN CANADIAN CONTRACT LAW

2015 ◽  
Vol 74 (1) ◽  
pp. 4-7 ◽  
Author(s):  
Chris D.L. Hunt
Keyword(s):  
International Trade ◽  
General Principle ◽  
Common Law ◽  
Contract Law ◽  
Good Faith ◽  
Hospital Services ◽  
Similar Statement ◽  
General Duty ◽  
Binding Force

IN Mellish v Motteux (1792) 170 E.R. 113, 157, Lord Kenyon observed that “in contracts of all kinds, it is of the highest importance that courts of law should compel the observance of honesty and good faith”. This passage echoes a similar statement by Lord Mansfield 25 years earlier in Carter v Boehm (1766) 97 E.R. 1162, 1910. Despite these early statements of principle, the modern common law has been notoriously hostile to the notion that contracting parties are under a general duty of good faith in the performance of their obligations (see W.P. Yee, “Protecting Parties' Reasonable Expectations: A General Principle of Good Faith” (2001) 1 Oxford U. Commonwealth L.J. 195), and there is certainly “no firm line of modern cases to support such an obligation” in English law (see L.E. Trakman and K. Sharma, “The Binding Force of Agreements to Negotiate in Good Faith” [2014] C.L.J. 598). Nevertheless, some recent decisions in Australia, Canada, and England have begun to imply obligations to perform certain types of promises, in certain classes of contracts, in an honest manner, crafting, in the words of Lord Bingham, “piecemeal solutions in response to piecemeal problems” (Interfoto Picture Library v Stiletto Visual Programmes Ltd. [1989] 1 QB 433, 439 (CA)). A recent English example is Yam Seng Pte Ltd. v International Trade Corporation Ltd. [2013] EWHC 111 (QB) in which Leggatt J. found there to be an implied duty of “honesty” and “fidelity to the bargain” in the context of a long-term distribution contract. Importantly, His Lordship emphasised that whether such obligations can be implied is a matter of construction, which involves ascertaining the parties' objective intentions through conventional techniques such as the principle of business efficacy. As implying such obligations depends entirely on the context of each contract (at paras [137]–[143]) there is, at present, no general principle of good faith performance in English contract law, despite some case-by-case recognition (see Mid-Essex Hospital Services N.H.S. Trust v Compass Group UK and Ireland Ltd. [2013] EWCA Civ 200, at [105], [150]).

Contract Formation in Hong Kong

2018 ◽  
Author(s):  
Lusina HO
Keyword(s):  
Hong Kong ◽  
Social Context ◽  
Common Law ◽  
General Rule ◽  
Good Faith ◽  
Local Context ◽  
General Duty ◽  
Contract Formation ◽  
Formal Requirement ◽  
The Law

This chapter examines the law on contract formation in Hong Kong which is closely modelled on the English common law but adapts the English solutions to the local context if and when required. The test for ascertaining the parties’ meeting of the minds is objective, the agreement (an offer with a matching acceptance) must be certain, complete, and made with the intention to create legal relations—the latter being presumed to be present in a commercial context and absent in a familial or social context. Offers are freely revocable although the reliance of the offeree is protected in exceptional circumstances. Acceptances become effective as soon as they are dispatched. In the ‘battle of forms’ scenario, the Hong Kong courts follow the traditional ‘last-shot’ rule. There is no general duty to negotiate in good faith, and even agreements to negotiate in good faith are normally unenforceable for lack of certainty. As a general rule, contracts can be validly made without adhering to any formal requirement. Online contracts will normally be valid and enforceable; the formation of such contracts is governed by common law as supplemented by legislation.

scholarly journals GOOD FAITH IN FRANCHISE CONTRACT

2020 ◽  
Vol 5 (19) ◽  
pp. 118-127
Author(s):  
Nurli Yaacob ◽  
Nasri Naiimi
Keyword(s):  
Common Law ◽  
Good Faith ◽  
Relational Contracts ◽  
Law System ◽  
Freedom Of Contract ◽  
Term Contract ◽  
The Common ◽  
Definition Of ◽  
The Right

Good faith has been defined as justice, fairness, reasonableness, decency, taking no chances, and so on. The concept of good faith has long been rooted in contract law under the jurisdiction of Civil law, although the definition of it is still debated until today. However, the view of the Common Law tradition does not recognize the concept of good faith as long as the contract is entered into with the freedom of contract and both parties abide by the terms of the contract. Given that a franchise contract involves a long-term contract and always been developed, it is impossible to define both rights and responsibilities base on express terms only. As such, the franchise contract gives the franchisor the right to exercise its discretion in executing the contract. It is in this context that the element of good faith is very important to ensure that the franchisor does not take advantage of the franchisee and that the business continues to prosper. Therefore, the objective of this article is to discuss the concept of good faith in a franchise contract. The findings show that the common law system that initially rejected the application of the concept of good faith also changed its approach and began to recognize the concept of good faith as it is very important for relational contracts such as franchise contracts.

15. Good faith

Contract Law ◽  
2018 ◽  
Author(s):  
Mindy Chen-Wishart
Keyword(s):  
Contract Law ◽  
Good Faith ◽  
Diverse Range ◽  
General Duty ◽  
English Law ◽  
The Law ◽  
The Difference

English law does not currently recognise a general duty of good faith, but this position is increasingly being challenged. In addition, good faith informs a diverse range of legal doctrines and principles. This chapter addresses the following: the meaning of good faith; good faith in current contract law; and the nature of good faith. It further considers whether English law should recognise a general good faith doctrine and the difference this might make to various aspects of the law.

Ch.1 General Provisions, General Provisions III: Arts 1.6–1.12—Application of the PICC, Art.1.7

2015 ◽  
Author(s):  
Vogenauer Stefan
Keyword(s):  
International Trade ◽  
Burden Of Proof ◽  
Contract Law ◽  
Ethical Standard ◽  
Good Faith ◽  
Fair Dealing ◽  
Global Trend

This commentary focuses on Article 1.7, which obliges the parties to a contract to ‘act in accordance with good faith and fair dealing’. The imposition of this duty corresponds to a global trend towards an increasing role for the standard of good faith in contract law that has been emerging for several decades. To a certain extent, the UNIDROIT Principles of International Commercial Contracts (PICC) help to reinforce this trend. Art 1.7 spells out the scope of the obligation to act in accordance with good faith and fair dealing; standard of good faith and fair dealing, including ethical standard and standard employed ‘in international trade’; consequences of failure to act in accordance with good faith and fair dealing; and burden of proof.

scholarly journals Documentary Letter of Credit: A Pivotal Case for the Inefficiency of the Law of Contract

2014 ◽  
Vol 35 (4) ◽  
pp. 487-532
Author(s):  
Malgorzata Karolina Chmielewska
Keyword(s):  
International Trade ◽  
Comparative Analysis ◽  
Guinea Pig ◽  
Common Law ◽  
Civil Law ◽  
Contract Law ◽  
Letter Of Credit ◽  
Distinct Mechanism ◽  
The Law ◽  
Commercial Device

This study compares the methods used both in common law and civil law jurisdictions to deal with the basic problems relating to the documentary letter of credit. A unique commercial device was thus developed in international trade as a means of ensuring safe and swift payment for goods. Even though this distinct mechanism works efficiently in practice, the numerous attempts made to classify it legally have been unsuccessful. A comparative analysis of the legal conceptualizations traditionally used to explain the nature of credit reveals apparent shortcomings in contractual theories. Because the basis of the documentary credit appears to be an abstract promise to pay, this phenomenon seems to break through the conceptual framework of traditional contract law theory. This is due to the fact that the process of forming the credit does not fit into the ordinary offer-acceptance formula. Yet, the easiest solution—the credit as a "mercantile specialty" or a "sui generis contract"—avoids facing the true challenge of our era, which is re-thinking the concept of "contracts" under modern laws. Legal debates should be directed in a more functional direction in order to provide satisfactory theoretical grounds for providing solutions to obvious, but still unanswered questions such as why people ought to keep their promises and why only some of those promises are likely to be legally enforced. It seems that, in this regard, documentary credit would be a convenient "guinea pig" for most contemporary concepts relating to the law of contracts.

scholarly journals Confidentiality - A Two-Appeal Principle

2018 ◽  
Vol 1 (3) ◽  
pp. 53
Author(s):  
Dr. Brunela Kullolli
Keyword(s):  
Common Law ◽  
Civil Law ◽  
Contract Law ◽  
Good Faith ◽  
The Third ◽  
Article Analysis ◽  
The Common ◽  
The Moment ◽  
Contractual Relation

This article analysis relates to the creation of conditions for the conclusion of the contract.This is the moment when the negotiating parties determine whether there will be a contract or not. This is the stage that in the best case is finalized with the contract signing.Known as the pre-contractual stage, it is considered as the foundation of the contractual relationship.Conduct in good faith at the stage of entering into a contract would also avoid causing potential damages and liability".- The first part gives , of Completion of the contract in good faith, is a legal requirement under the Civil Laë tradition, but unlike the requirement for pre-contractual trust, finds place in the Common Law tradition.In this part of the study, the detailed treatment of the manner of performance of the contract will be set aside, focusing mainly on the obligations that dictate its fulfillment in good faith and the liability incurred in the event of its absence . The second part is concentrated, Contract Interpretation. The third part will be treated as a brief and comparative overview of the common law of Civil Law in the interpretation of the contract, taking into account the main interpretative criteria, to underline the main differences between them. Among all the criteria, the focus will be on trust, which is sanctioned as a special criterion of interpretation by the Civil Law countries. The fourth part analysis the validity of the contract.In this last part of the chapter, I will try to clarify the confusion created between the rules of contract validity and the rules of conduct, as well as the role and impact of the breach of the trust principle in the validity of the contract. Conclusions .Regarding the situations that arise for the damage that comes to the parties from non-fulfillment of obligations and breach of the principle of good faith during the contract's formation, it is necessary to clarify how the type of damage that came during the pre-contractual phase and which interest has failed to realize one of the parties. In fact, this is a genuine duty of the court which, as the case may be, must specify exactly: the responsibility of the parties, the interest that has been violated, the type of damage that has been caused.Keywords: contract law ,internal law ,contractual relation,internal contract interpretation, civil law

16. Misrepresentation

2021 ◽  
pp. 235-263
Author(s):  
Paul S. Davies
Keyword(s):  
Common Law ◽  
Contract Law ◽  
Good Faith ◽  
Third Party ◽  
Original Position ◽  
Long Period

This chapter discusses misrepresentation in contract law. Misrepresentation is a statement of fact or law which is false, that induces a party to enter into the contract. A misrepresentation may be made by words or by conduct. All misrepresentations entitle the misrepresentee to rescind the contract. However, rescission will be barred where it is impossible to put the parties back into their original position; or where the misrepresentee has affirmed the contract; or where a long period of time has elapsed; or where a third party who has acquired rights for value in good faith would be disadvantaged by rescission. Damages are available at common law for the tort of deceit or for negligent misrepresentation. Most claims for damages are now made under section 2(1) of the Misrepresentation Act 1967.

Brownsword, R and Howells, G, ‘The implementation of the EC Directive on Unfair Terms in Consumer Contracts – some unresolved questions’ [1995] JBL 243. Brownsword, R, Howells, G and Wilhelmsson, T (eds), Welfarism in Contract, 1994, Aldershot: Dartmouth. Burrows, A, (ed), Essays on the Law of Restitution, 1991, Oxford: Clarendon. Burrows, A, The Law of Restitution, 1993, London: Butterworths. Burrows, A, Understanding the Law of Obligations, 1998, Oxford: Hart. Burrows, A, ‘Free acceptance and the law of restitution’ (1988) 104 LQR 576. Carr, C, ‘Lloyd’s Bank Ltd v Bundy’ (1975) 38 MLR 463. Cheshire, G, Fifoot, C and Furmston, M, Law of Contract, 13th edn, 1996, London: Butterworths/Tolley. Chitty (Guest, AG (ed)), Contracts: General Principles, 27th edn, 1994, London: Sweet & Maxwell. Coase, R, ‘The problem of social cost’ (1960) 3 Journal of Law and Economics 1. Collins, H, Law of Contract, 3rd edn, 1997, London: Butterworths. Collins, H, ‘Good faith in European contract law’ (1994) OJLS 229. Cooke, PJ and Oughton, DW, The Common Law of Obligations, 3rd edn, 2000, London: Butterworths. Coote, B, Exception Clauses, 1964, London: Sweet & Maxwell. Coote, B, ‘The Unfair Contract Terms Act 1977’ (1978) 41 MLR 312. De Lacey, J, ‘Selling in the course of a business under the Sale of Goods Act 1979’ (1999) 62 MLR 776. Dean, M, ‘Unfair contract terms – the European approach’ (1993) 56 MLR 581. Duffy, P, ‘Unfair terms and the draft EC Directive’ (1993) JBL 67. Evans, A, ‘The Anglo-American mailing rule’ (1966) 15 ICLQ 553. Fehlberg, B, ‘The husband, the bank, the wife and her signature – the sequel’ (1996) 59 MLR 675.

1995 ◽  
pp. 808-808
Keyword(s):  
Law And Economics ◽  
Common Law ◽  
Contract Law ◽  
Good Faith ◽  
European Contract ◽  
Consumer Contracts ◽  
The Common ◽  
The Law ◽  
Anglo American ◽  
Unfair Terms

16. Misrepresentation

2018 ◽  
Author(s):  
Paul S. Davies
Keyword(s):  
Common Law ◽  
Contract Law ◽  
Good Faith ◽  
Third Party ◽  
Original Position ◽  
Long Period

This chapter discusses misrepresentation in contract law. Misrepresentation is a statement of fact or law which is false, that induces a party to enter into the contract. A misrepresentation may be made by words or by conduct. All misrepresentations entitle the misrepresentee to rescind the contract. However, rescission will be barred where it is impossible to put the parties back into their original position; or where the misrepresentee has affirmed the contract; or where a long period of time has elapsed; or where a third party who has acquired rights for value in good faith would be disadvantaged by rescission. Damages are available at common law for the tort of deceit or for negligent misrepresentation. Most claims for damages are now made under section 2(1) of the Misrepresentation Act 1967.

Part I Fundamentals, 1 Sources and General Features

2021 ◽  
Author(s):  
Andrews Neil
Keyword(s):  
Common Law ◽  
Case Law ◽  
Contract Law ◽  
Good Faith ◽  
The Law

This is an introductory chapter. The case law tradition of English contract law is explained, including the distinction between Common Law and Equity. The requirements of consensus are analysed. There is an overview of modern developments in the law. Doctrinal controversies are listed, with references to parts of the book where ‘Evaluation’ sections provide comment on difficult or uncertain developments or topics. There are forty-nine such ‘Evaluation’ sections, amongst which the author’s discussion of the following topics merits special attention: negotiation agreements [4.35] and [4.42]; the rule in Pinnel’s Case [6.82]; the ‘fiction of fraud’ and the Misrepresentation Act 1967 [11.113]; duress as to person [13.27]; illegitimate (but not unlawful) pressure [13.38]; good faith [19.27]; the White & Carter case [27.66].

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