English Commercial Law - common law system on good faith
In general, common law systems lack a comparable principle. For instance, English contract law historically lacked a good faith doctrine. Recent cases do provide some evidence that the English courts are beginning to appreciate the significance of the good faith and fair dealing doctrine, though. The claimants in Yam Seng Pte Ltd v. International Trade Corporation [2013] EWHC 111 (QB), a Singapore-registered corporation, were mislead during the negotiation process. The key concern was whether there may be an implied duty of good faith in the contract. The judge believed that English law was absorbing European concepts of good faith and fair dealing, particularly in arrangements involving long-term partnerships, like franchise or distribution agreements. In Bristol Groundschool Ltd. v. Data Capture Limited [2014] EWHC 2145, this was done (Ch). Even though this was simply a first-instance ruling, it demonstrates that courts may be willing to infer a duty of good faith into so-called "relational" contracts—long-term agreements requiring extensive cooperation and communication between the parties. Long-term distribution, franchise, joint venture, or building contracts are a few examples of these arrangements. There is no theory of good faith in English law, and if the parties intend to impose such a duty, they must do so expressly, the Court of Appeal held in Mid Essex Hospital Services NHS Trust v. Compass Group UK & Ireland Ltd (t/a Medirest) [2013] EWCA Civ 200, overturning a High Court ruling. This judgement supersedes the earlier High Court rulings because it was made by the Court of Appeal. Conclusion: If the parties want to make sure that an obligation of good faith is included in an English contract, it should be expressly expressed. An obligation of good faith may be implied in certain instances, but it will not be assumed as a general rule.
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