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CONTRACT: Faith in the system

07 June 2013  

Alistair Maughan and Sarah Wells look at whether a duty of good faith can ever be implied into a contract?

Charles Dickens once wrote that ‘the one great principle of English law is to make business for itself’. This often-quoted view is still true today and is perfectly illustrated by a pair of recent cases about the issue of whether a general duty of good faith can be implied into an English law contract. And, in a through-the-looking-glass twist, of which Dickens’ fellow Victorian Lewis Carroll would have approved, the court considering a contract without a good faith clause found itself prepared to imply a duty of good faith after all, whereas the court examining a contract actually containing such a clause did exactly the opposite and rejected the concept that a good faith doctrine exists in English law.

Additional Info

  • Case(s) Referenced:

    Berkeley Community Villages Ltd & anor v Pullen & ors [2007] EWHC 1330 (Ch)

    Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (trading as Medirest) [2013] EWCA Civ 200

    Gold Group Properties Ltd v BDW Trading Ltd [2010] EWHC 323 (TCC)

    Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] 1 QB 433

    Yam Seng Pte Ltd v International Trade Corporation Ltd [2013] EWHC 111 (QB)