Symposium 2018: Good Faith in Contract

May 10-11, 2018

Montréal, Québec

Is there a stand-alone duty of Good Faith in contract? If so, what should that duty look like, and how should courts go about interpreting it? How does an implied obligation of good faith impact the right of freedom of contract? And, assuming there is an obligation of good faith, how should it be defined?

Although civil law jurisdictions have long imported an obligation of good faith into contract, the common law has generally tended to refrain from imposing an implied duty of good faith in the performance of contracts except in certain limited circumstances.

The traditional reluctance to recognise a generalised duty of good faith has recently begun to break down as courts in the United States and the Commonwealth have begun to consider whether contract law should imply such a duty. While not explicitly holding that such a duty exists, courts in the United Kingdom and Australia have considered whether a duty should be implied in recent years. In Bhasin v Hrynew (2014), a unanimous Supreme Court of Canada recognized that good faith contractual performance is a general “organizing principle” of Canadian common law, and that parties to a contract are under a duty to act honestly in the performance of their contractual obligations. Meanwhile, the Irish Court of Appeal has specifically rejected a duty of good faith in commercial contracts.

What, therefore, is this duty of good faith? What, exactly, is an “organising principle”? What impact does the recognition of a duty of good faith have on party autonomy? What effect will the divergence of opinion on the development of the duty have on the principle of uniformity that underlies the common law across the common law world?

The papers from the symposium were published in the Journal of Commonwealth Law and may be accessed here:

This content has been updated on 16 October 2019 at 21 h 51 min.