Existence of ‘good faith’ obligations in English contract law to be debated by experts

Sir George Leggatt—whose forthcoming elevation to the Court of Appeal was recently announced—will chair a discussion at the University of Exeter on the controversial topic of good faith in English contract law. Through his judicial decisions, Sir George has reignited the debate as to whether contractual parties should be bound by an implied term that they will act in accordance with good faith.

The conference brings together leading academics, practitioners and policy experts to explore the competing arguments, offering both an international perspective and a consideration of the special rules applicable to insurance contracts.

Mr Justice Leggatt explored the concept of good faith in cases such as Yam Seng Pte Ltd v ITC Ltd. Good faith requires contractual parties to adhere to reasonable commercial standards of fair dealing, the agreed common purpose of a contract and reasonable expectations arising from it. Although the approach has not so far met with favour in the Court of Appeal, it is widely recognised in other jurisdictions—across Europe as well as further afield in Australia, Canada and the United States.

Speaking extra-judicially, Sir George has argued that: “There is…a case to be made for recognising an obligation of good faith in the performance of contracts as…a default rule. Faithfulness to the agreed common purpose of the contract, adherence to reasonable commercial standards of fair dealing – these are values which protect the integrity of the process of contracting and promote its effectiveness. There are also economic arguments that such a default rule would help to reduce the costs of contracting.”

The speakers at the conference are Professor Daleen Millard, from the University of Johannesburg, Professor Pascale Chapdelaine from the University of Windsor, Canada, Professor Rob Merkin, Dr Séverine Saintier and Peter Tyldesley from the University of Exeter, Professor Gerard McMeel from the University of Manchester and Tamara Goriely from the English Law Commission. Sir George Leggatt will give a closing address.

The event will be held on Saturday, July 29 at the Innovation Centre, University of Exeter, from 9:30 am to 5.00 pm.