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

Birketts—trainee cohort

Birketts—trainee cohort

Firm welcomes new cohort of 29 trainee solicitors for 2025

Keoghs—four appointments

Keoghs—four appointments

Four partner hires expand legal expertise in Scotland and Northern Ireland

Brabners—Ben Lamb

Brabners—Ben Lamb

Real estate team in Yorkshire welcomes new partner

NEWS
Robert Taylor of 360 Law Services warns in this week's NLJ that adoption of artificial intelligence (AI) risks entrenching disadvantage for SME law firms, unless tools are tailored to their needs
From oligarchs to cosmetic clinics, strategic lawsuits against public participation (SLAPPs) target journalists, activists and ordinary citizens with intimidating legal tactics. Writing in NLJ this week, Sadie Whittam of Lancaster University explores the weaponisation of litigation to silence critics
Delays and dysfunction continue to mount in the county court, as revealed in a scathing Justice Committee report and under discussion this week by NLJ columnist Professor Dominic Regan of City Law School. Bulk claims—especially from private parking firms—are overwhelming the system, with 8,000 cases filed weekly
Writing in NLJ this week, Thomas Rothwell and Kavish Shah of Falcon Chambers unpack the surprise inclusion of a ban on upwards-only rent reviews in the English Devolution and Community Empowerment Bill
Charles Pigott of Mills & Reeve charts the turbulent progress of the Employment Rights Bill through the House of Lords, in this week's NLJ
back-to-top-scroll