This is the fourth in our series of contract disputes practical guides, designed to provide clients with practical guidance on some key issues that feature in disputes relating to commercial contracts under Hong Kong law.
There are certain contracts which are governed by obligations of utmost good faith – insurance and reinsurance contracts, for example. There are also contracts, such as partnership deeds, which impose similar obligations. These are not the subject of this guide. Here we are concerned with ordinary, commercial contracts, which are traditionally governed by the maxim ‘caveat emptor’ (let the buyer beware), a maxim which does not easily lend itself to the imposition of obligations of good faith between arm’s length contracting parties.