The English law’s relationship with the doctrine of good faith in contracts has undergone a process of transformation. Whilst there is no general duty of good faith in English contract law, such an obligation has been found to exist in commercial contracts both by its inclusion as an express term, and also by implication. There are both express and implied contractual obligations to act in good faith, and their breach can set forth different remedies in law. There is an inherent doctrinal problem in the courts that have interpreted the relational contracts as being capable of implying a good faith clause. In Yam Seng Pte v. International Trade Corp (2013 EWHC 111 (QB), 2013 1 All ER (Comm) 132) it was held that English law recognizes a duty of good faith in relational contracts and by implication in all commercial contracts. The question is whether the elements of a business contract have implied terms, such as bargaining clauses, business efficacy and reasonableness in order to give rise to a duty of good faith. This paper considers the duty of good faith in the commercial contracts in order to evaluate as to when it is in required in a breach of contract, and if it can be invoked when there is an express or implied duty of good faith, that has led to an unfair outcome.
Zia Akhtar (Sun,) studied this question.