Deck 15: Good Faith

Question 1

Which of the following statements is true?

A) There is a common consensus as to the meaning of good faith in contract law.
B) English common law recognises a general duty of good faith.
C) Good faith in contract law imposes limits on self-interested conduct and requires some regard for the interests of the other party.

Answer 1

C

Question 2

Good faith in the common law gives rise to an independent cause of action.

Answer 2

False

Question 3

Which of the following statements is false?

A) The strength of any good faith duty depends on the nature of the parties' relationship.
B) There are some circumstances where contract terms may be invalidated directly on the basis that they do not comply with good faith.
C) In jurisdictions openly recognising good faith, it is justified as based on the parties' implied agreement and may be excluded by agreement.
D) All of the above.

Answer 3

C

Question 4

What did Leggatt J say about the types of contracts into which good faith could be implied in Yam Seng Pte Ltd v International Trade Corp Ltd (2013)?

A) The court should imply a term of good faith into all contracts.
B) Good faith obligations are more likely to be required to give business efficacy to the parties' arrangements in longer term contracts requiring commitment and cooperation.
C) Good faith duties should not be implied into contracts due to the risk of contradicting the parties' intentions.