Good Faith Obligations in English Law


Unlike many civil law jurisdictions in Europe, English law has generally not recognised an implied obligation that contractual parties should perform their obligations in good faith. English courts take the view that parties should have the freedom to contract in the way that they wish, and so have been reluctant to intervene and impose overriding obligations of good faith. However, in recent years, the position has somewhat shifted, and Scottish law and certain common law jurisdictions (such as Canada and Australia), have begun to recognise a principle of good faith in some circumstances.

Against this background, two recent cases have thrown the issue of good faith in English law back into the spotlight. In the light of these cases now, is it now possible that a good faith obligation could be implied into an English law contract?

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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