CBFL Webinar: Documentary Credits: Document Examination in the Era of Targeted Sanctions and Artificial Intelligence

On 25 July 2024, CBFL Adjunct Research Fellow Jack Wright Nelson presented a working paper titled “Relational Contracts, Good Faith, and the Braganza Duty: Locating the Abuse of Rights Doctrine in English Contract Law” at an event organized by CBFL Director Sandra Booysen.

Nelson’s paper examined the implications of the relational contract doctrine in English law following the Court of Appeal’s 2022 decision in Candey Ltd v Bosheh. He explored how recognizing relational contracts and their implied duty of good faith might further anchor the long-debated presence of an abuse of rights doctrine in English contract law. More specifically, he argued that the Braganza duty, which limits contractual discretion, combined with the good faith obligation endorsed in Candey, may be tantamount in practice to a principle against the abuse of rights. He specifically analyzed the potential impact on financial contracts, challenging the view expressed by the Financial Markets Law Committee that Candey‘s consequences will remain primarily academic. By comparing English developments with American scholarship on relational contracts in finance, he suggested that the implications for English financial law may be more significant than currently anticipated, with the potential to reshape the exercise of contractual discretions.

Professor Mindy Chen-Wishart and Associate Professor Zhong Xing Tan served as commentators, offering important and critical insights on Nelson’s arguments. Their comments addressed the practical implications and challenges of recognizing an abuse of rights doctrine in English contract law, as well as the relevance of relational contract theory to financial contracts. Further input from Professor Wayne Courtney, CBFL Research Fellow Dr. Jamieson Kirkwood, Sheridan Fellow Timothy Chan, and CBFL alumna and SMU Assistant Professor Rachel Phang enriched the discussion with comparative analyses with American law and historical perspectives on the reception of relational contract theory in English courts.

The presentation and subsequent discussion explored:

1. The suitability of relational contract theory as a foundation for expanding good faith obligations
2. Implications of relational theory for commercial certainty and freedom of contract, and potential application of these principles in future cases involving financial contracts
3. The utility of identifying an abuse of rights principle in English law

Overall, this working paper presentation sought to contribute to the ongoing academic discourse on the evolution of English contract law, particularly in the realm of financial contracts, by examining the potential intersection of relational contract theory, good faith principles, and the abuse of rights doctrine.