The traditional starting point in English contract law is that parties are free to do what they like so long as they do not breach the agreed terms.
But it is becoming increasingly common for parties to agree terms requiring them to act in “good faith”, or similar. Even where no such term is expressed in the contract, courts and tribunals are increasingly being asked to imply good faith obligations.
As a result, commercial parties may be uncertain what is required of them.
In this fourth of our updated and relaunched series of contract disputes practical guides, Chris Parker, Rachel Lidgate and Alex Kay consider the circumstances in which parties may owe one another duties of good faith, what those duties may involve, and some practical steps that can be taken to minimise the risks.
We will be publishing further editions of the updated series of contract disputes practical guides in the coming months. In the meantime, the first three editions in our relaunched series, and the remaining editions from the original series, are available here on our Litigation Notes blog.