English contract law: good faith, a common law duty?

Analysis

Following a number of high profile decisions of the English courts on commonly used contractual provisions, this update takes a closer look at the meaning and scope of good faith clauses.

Lawyers operating in civil law jurisdictions are well versed in the application of a general duty of good faith in the performance of contracts. For example, in the UAE Civil Code, Article 246 states:

"The contract must be performed in accordance with its contents, and in a manner consistent with the requirements of good faith."

Traditionally, the English courts have not been prepared to imply a general duty of good faith. English law has prized the rights of the parties to determine their own contractual provisions and, as a result, have been reluctant to imply provisions which the parties have not stated for themselves. However, other common law countries have moved towards recognising such a duty. In addition, the draft Unified European Contract Law contains a good faith concept.