UK Ruling Adds Clarity To Duty Of Good Faith In Contracts

English law does not impose a duty of good faith on all contracting parties, unlike some other legal systems.

However, there is now a body of cases in which such duty has been implied in commercial contracts. English law also imposes some restrictions on the exercise of contractual discretion.

This article considers recent developments in the circumstances under which a duty of good faith can be implied into a commercial contract, the potential expressly to exclude such duty, and the remedies available for breach of such duty.