Good faith, honesty, and reasonableness: goodwill to all? The duty to act in good faith and what it means to act reasonably

The English courts have historically shown hostility towards the doctrine of good faith in English contract law. It is generally understood that there is no legal principle of good faith in dealings between commercial contractual parties. This is in contrast to many civil law systems, in which there may be an overriding principle that parties must act in good faith in the negotiation of and the performance of contractual obligations. Increasingly, parties are incorporating express terms that each party must act in good faith, but where no such term has been agreed, there is now a question whether a party must discharge his contractual obligations in good faith. We consider this issue together with the concept of what it means to act “reasonably” in this short Christmas Briefing.
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