Book Title: Research Handbook on the Philosophy of Contract Law

Publisher: Edward Elgar Publishing

Abstract: Good faith is commonly rejected as ideologically and institutionally inconsistent with the English common law of contract. The orthodox criticisms of good faith are inapt, answerable or overstated, especially when the different versions of good faith targeted are disentangled. Once good faith has been rejected as a cause of action, and an active principle demanding immediate changes to parties’ rights and obligations, we argue that the ‘piecemeal’ solutions to problems of unfairness in English law are the very content of the ‘humble’ version of good faith. Good faith is, therefore, an explanatory, organisational and legitimising principle. It is an attitude that contract parties are required to assume when participating in the activity of contracting, necessitating respect for the counterparty’s legitimate interests (honesty and fair dealing) and respect for the contract itself (fidelity to the contractual purpose). Its demands are calibrated according to the nature of the contract (arm’s-length, symbiotic, recognised inequality, and fiduciary), and it is justified as necessary to protect the institution of contract. On this model, good faith is externally imposed, varies according to the social and legal culture, is episodic and consistent with common law incrementalism.