Topic: Should English Law introduce a duty to negotiate in good faith?

  1. Working definition:

2.A) Introduction- Definition of Good faith
i) Parties must negotiate in Good faith?
No Statutory or generally applicable definition of the doctrine- unbridled judicial discretion to determine standards of contractual morality

2.B) Excluder analysis by Summers- heterogeneous forms of bad faith, no single meaning. 

Two elements/aspects derived by English case law to give meaning to negating in good faith:

A duty of honesty
Problem: Objective or Subjective approach (Twinsectra Ltd v Yardley)
To observe reasonable commercial standards of fair dealing, to be faithful to the parties’ agreed common purpose and to behave consistently with their justified expectations’
-Courts resorted to interpret contracts by using an objective standard of resaobleneess
Problem: The need to assess subjective intention?

Aim of this chapter for the purpose of my dissertation: I delve into understanding the scope/clear-cut definition of good faith in order to assess the necessity of introduction in English law. Furthermore, I argue that familiarising a notion of negotiating in “Good Faith” is highly problematically for two reasons:

1.The coverage of Good faith is abstract – No certain definition or generally applicably concept that can be overseen.

2.Clash of objective and subjective approaches in regulating the doctrine for contracting parties to negotiate and perform their obligations.

  1. Comparative examination of good faith between the Canadian ‘general organizing principle’ and the English ‘piecemeal approach’:

4.A) The Canadian ‘general organizing principle-

Bhasin v Hrynew (2014) recognized: a binding agreement to negotiate in good faith

SSC LINE OF REASONING:

  1. ‘good faith contractual performance is a general organizing principle of the common law of contract’
  2. ‘common law duty that applies to all contracts to act honestly in the performance of contractual obligations’

Note: It applies only in the context of the performance of contractual obligations, and not to the negotiation of the contracts themselves

4.B) Impact on subsequent in Canadian case:
*Addison Chevrolet Buick GMC Limited et al. v General Motors of Canada Limited 2015
*Expoed Inc. v. Anaca Technologies Ltd., 2017
*Northrock Resources v ExxonMobil Canada Energy, 2017
4.C) Seminal? burden of interpreting the organizing principle 

1) Still no concrete definition of good faith, instead proposed vague guidelines about how good faith requires behaviour that is “reasonable” and “not arbitrary.” Increase in litigation

Rebuttal: Malleability
Expansion: Applied in a wide range of contexts and circumstances, must necessarily be defined at a high level of abstraction- in order to enforce expected commercial standards.

2) Hinder communication between contractual parties
Expansion: the duty of honest performance prohibits active dishonesty, or lying, but does not impose a positive duty of disclosure. One likely consequence of this distinction is that contracting parties may be tempted to remain silent rather than make representations that risk to be found untrue.

4.D) The English piecemeal approach:

In Carter v Boehm, Lord Mansfield stated that the governing principle of “good faith” was applicable to “all contracts and dealings”. Overlooked by English Courts

However, there is an implied duty to act in good faith only in some areas of English contract law: the doctrine of uberrimae fidei in insurance contracts, employment law, partnership Law and fiduciary relationships.

Significantly, there is no common duty of good faith upon the parties in English law mainly as the piecemeal solution resolves problems of unfairness with the absence of duty to good faith. Additionally, the capacity of Yam Seng and other English case law is unsettled and ambiguous.

“Far from foundering in an ocean of competitors, English law is surfing the wave”

4.E) The piecemeal approach and Brownsworth’s pragmatic thesis: Give effect analogous to a duty to negotiate in good faith

-Contractual interpretation-

-Equitable doctrines- Promissory estoppel, Misrepresentation, Duress, Unjust Enrichment and Restitution.

Express terms: Possibility of including provisions to negotiate in good faith.

-Implied terms at common law

Aim of this chapter: To critically compare the two jurisdiction’s approach of the duty to negotiate in good faith and align the scourges of a general organizing principle. More particularly, the English stance as to the doctrine of the duty to negotiate/act in good faith should be regarded as an inspiration for Canada and other common law jurisdictions. The former can be supported by the piecemeal approach taken by English courts without requiring an uncertain and incapable notion.

Type of service: Dissertation services
Type of assignment: Dissertation
Subject: Law
Pages/words: 15/4000
Number of sources: 2
Academic level: Undergraduate
Paper format: APA
Line spacing: Double
Language style: UK English

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