By Oliver Browne

Although there remains no widely accepted definition of good faith under English law, and English law has committed itself to no overriding principle of good faith, English law has developed piecemeal solutions in response to demonstrated problems of unfairness.

The variety of these solutions, and the pace with which they are being adopted, is increasing. Indeed, the English courts are starting to embrace the idea of good faith, bringing English law more in step with the laws of other developed jurisdictions.

What does good faith mean?

Unfortunately there remains some doubt. Some cases have described the duty to act in good faith as an obligation to observe reasonable commercial standards of fair dealing, others have addressed the notion of acting consistently with the justified expectations of the parties. Judges have also referred to acting within the spirit of the contract and working together / honestly endeavouring to achieve the stated purposes expressly linked to the duty. They have also emphasised the objective nature of the assessment of good faith in a number of cases, however, courts will take into account the context of the situation and relationship between the parties. A breach of an obligation of good faith is often evidenced by an act of bad faith.