The Court of Appeal reiterates the importance of the specific context in interpreting contractual good-faith duties.

By Oliver E. Browne and Alex Cox

English law does not include a general implied duty of good faith. However, the English courts are willing to enforce contractual duties of good faith. In Mark Faulkner & Ors v. Vollin Holdings Limited & Ors[1], the Court of Appeal provided important clarification on the approach to such contractual good-faith duties.

Background

The case related to an unfair prejudice petition under section 994 of the Companies Act 2006, brought by the minority shareholders (the Minorities) in Compound Photonics Group Limited (CPGL) against the majority investors (the Investors) in CPGL.