header-logo header-logo

Keeping the faith

25 March 2016 / Chris Nillesen
Issue: 7692 / Categories: Features , Commercial
printer mail-detail
001_nlj_7692_nillesen

Can good faith be contractually implied, asks Chris Nillesen

The recent case of Portsmouth City Council v Ensign Highways Ltd [2015] EWHC 1969 (TCC), [2015] All ER (D) 146 (Jul) ( PCC ) sheds further light on the continuing debate on how good faith should (if at all) be implied in English contract law.

While English courts accept that parties to a contract cannot act fraudulently or dishonestly they have generally shied away from implying a duty of good faith. The concept of good faith is based on honesty and fair dealing. Bad faith, by way of contrast, has been distinguished from dishonest behaviour as behaviour that is “improper, commercially unacceptable or unconscionable”.

Parties to a contractual dispute are quick to convince themselves that the conduct of the other party was in “bad faith”. Morally there is perhaps an obligation to act in good faith, however can this be contractually implied?

English courts have reasoned primarily on the following three grounds that it is not appropriate to imply such a duty:

  1. Courts should principally avoid
If you are not a subscriber, subscribe now to read this content
If you are already a subscriber sign in
...or Register for two weeks' free access to subscriber content

MOVERS & SHAKERS

Quinn Emanuel—James McSweeney

Quinn Emanuel—James McSweeney

London promotion underscores firm’s investment in white collar and investigations

Ward Hadaway—Louise Miller

Ward Hadaway—Louise Miller

Private client team strengthened by partner appointment

NLJ Career Profile: Kate Gaskell, Flex Legal

NLJ Career Profile: Kate Gaskell, Flex Legal

Kate Gaskell, CEO of Flex Legal, reflects on chasing her childhood dreams underscores the importance of welcoming those from all backgrounds into the profession

NEWS
One in five in-house lawyers suffer ‘high’ or ‘severe’ work-related stress, according to a report by global legal body, the Association of Corporate Counsel (ACC)
The Legal Ombudsman’s (LeO’s) plea for a budget increase has been rejected by the Law Society and accepted only ‘with reluctance’ by conveyancers
Overcrowded prisons, mental health hospitals and immigration centres are failing to meet international and domestic human rights standards, the National Preventive Mechanism (NPM) has warned
Two speedier and more streamlined qualification routes have been launched for probate and conveyancing professionals
Workplace stress was a contributing factor in almost one in eight cases before the employment tribunal last year, indicating its endemic grip on the UK workplace
back-to-top-scroll