This thesis explores the necessity of a principle of good faith in the performance of commercial contracts in England and Wales and suggests that commercial law would benefit from explicitly recognising such a concept. While the law can provide protection for certain cases of unfair conduct, such protection is insufficient, particularly where the parties have unequal bargaining power. Small or inexperienced businesses may find themselves legally obliged to perform agreements with implications they did not fully understand at the time of contracting. This may not always be due to their inexperience or oversight but can also result from a change in circumstances. The main criticism for introducing good faith into contract performance remains the uncertainty in contract enforcement. For too long the debate has been restricted to theoretical and judicial confines. The self-imposed rules of the market’s institutions clearly indicate that such fears are misplaced. In particular, Australia provides a concrete example showcasing the usefulness of the concept in franchising contracts. Indeed, this thesis argues that the current judicial stance is significantly delaying the recognition of good faith in contractual performance, not only by failing to provide an overarching standard of good faith in commercial contract performance but also by fixating on a traditional antagonistic view of contractual parties detached from contextual influences in contractual dealings. Legislation is needed to resolve the conundrum faced by the judiciary in what is perceived to be a colossal task, and recent legislative endeavours have failed to fully bridge the gap in regulating opportunistic conduct between businesses where consumer or competition laws are not triggered. This thesis proposes a pragmatic way forward with a statutory good faith standard for commercial contracts, with full awareness that this would inevitably necessitate a rehaul of the entire commercial contract law landscape.
Dimag Feridun (Thu,) studied this question.