Good Faith

Schäfer, Hans‐Bernd; Aksoy, Hüseyin Can

doi:10.1007/978-1-4614-7883-6_565-1

Cited by 2 publications

(3 citation statements)

References 7 publications

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“…While all the clauses in the standard forms of contracts are not mandatory to be included at the end of a negotiation, a party that is not familiar with legal risk assessment may have failed to apprehend any omission by the other party that could damage them during the construction contract performance. Therefore, good faith principle allows the courts to analyze and interpret construction contracts on the basis of 'treating others like how you would like to be treated'which is similar to golden rule interpretation (Schäfer & Aksoy, 2015).In similar vein, the parties are ought to enjoy the benefit of the contractual agreement as discussed in the case of Automasters Australia Pty Ltd v Brunes Pty Ltd & Anor [2002] WASC 286 [388]the court held that it is the principle of good faith reflected the "...duty to have due regard to the legitimate interests of both parties in the enjoyment of the fruits of the contract." Standard forms of contracts such as NEC and JCT have sufficiently covers implied good faith principle.…”

Section: Good Faith Principle and Construction Contractmentioning

confidence: 99%

Good Faith in Construction Contract: A Common Law Perspective

Abdullah

Ong

Nasir

et al. 2023

IJSCET

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The good faith principle requires contracting parties to be honest as well as consideringtheir contracting partners in performing their contractual duties. In the event, contract clauses are insufficient to protect the interests of the innocent party in a breached contract, the said innocent party may rely on the good faith principle to ensure the fair. However, applying good faith principles to construction contracts is a difficult task. By nature, construction contracts are unique due to the fact that parties (Client and Contractor) are presumed competent to carry out their parts of the contractual obligations. Controversially, the construction contract is often unfairly prejudicial as the Client would customarily have the upper hand in deciding the terms and conditions of a contract. It is the objective of the research to examine the relevancy of application of good faith principle in construction contractsby employingqualitative content analysis. This study adopts a qualitative research approach, mainly employing library and internet resources with the intention to explore relevant legislation, textbooks, journals, research papers and articles.The comparative approach in this paper used content analysis from primary and secondary legal resources of different jurisdictions in the United Kingdom, Malaysia and Australia to compare the application of the good faith principle in the context of construction contracts. The findings of the research revealsthat the adoption and application of the good faith principle in construction contracts is of limited usage even though it is widely usedin general contract law of United Kingdom, Malaysia and Australia.This article contributes to the knowledge of the good faith principle in construction contracts, particularly with standard form contracts, by highlighting the importance of the good faith principle in achieving a fairer functioning of construction contracts in its application.

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Section: Good Faith Principle and Construction Contractmentioning

confidence: 99%

Good Faith in Construction Contract: A Common Law Perspective

Abdullah

Ong

Nasir

et al. 2023

IJSCET

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show abstract

“…Cohen (1992) defines it as "any contractual conduct by one party contrary to the other party's reasonable expectations based on the parties' agreement, contractual norms, or conventional morality." Similarly, Posner (2007) defines opportunism as taking advantage of the other party's vulnerability. Mackaay and Leblanc (2003), who regard good faith as the opposite of opportunism, propose a test to operationalize opportunistic behavior: "an asymmetry between the parties; which one of them seeks to exploit to the detriment of the other in order to draw an undue advantage from it; the exploitation being sufficiently serious that, in the absence of a sanction, the victim and others like him or her are likely substantially to increase measures of self-protection before entering into a contract in the future, thereby reducing the overall level of contracting.…”

Section: Elements Of Opportunistic Behaviormentioning

confidence: 99%

“…The role of contract law can be explained as an endeavor to guarantee the fairness of the contract in the sense of avoiding opportunistic behavior (Posner 2007;Kaplow and Shavell 2002) and through the costefficient allocation of risk (Harrison 1995;Schwartz 2003;Sch€ afer and Ott 2004). In accordance with the purpose of contract law, if the good faith principle were used exclusively to curb opportunistic behavior and to allocate risks in a cost-efficient way in cases in which the established rules of contract law permitted opportunism, it would be regarded as a valuable corrective mechanism giving flexibility and innovativeness to contract law without questioning its rationale for facilitating win-win constellations under fair conditions.…”

Section: The Necessity To Curb Opportunistic Behavior With a Blanket mentioning

confidence: 99%

Encyclopedia of Law and Economics

Bogt¹

2020

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Good faith is a blanket clause under which courts develop standards of fair and honest behavior. It gives ample discretion to the judiciary and entitles a court to narrow down the interpretation of statutes or contracts and even to deviate from codified rules, from the wording in the law or the contract or to fill gaps. The law and economics literature relates bad faith to opportunistic behavior and it is accepted that in specific cases where the application of default or mandatory rules leads to opportunism or where both the law and the contract are silent on risk, the judge can resort to the good faith principle. As a result the parties may delegate part of the contractual drafting to the legal system in addition to having reduced apprehension regarding the possibility of opportunistic behavior from the other side. This allows them to keep contracts relatively short and reduces the costs of defensive strategies. Definition Good faith is a blanket clause in civil law under which courts develop standards of fair and honest behavior in the law of obligations, especially in contract law andto some extentin the law of property. Courts also define legal consequences resulting from the violations of such standards, such as reliance damages, expectation damages, injunction, imposing a duty of conduct, and invalidation or validation of a contract. The good faith principle entitles a court to narrow down the interpretation of statutes or contracts and even to deviate from codified rules, from the wording in the law or the contract or to fill gaps. Courts use it as a last resort, if and only if the contract itself or the rules of contract law lead to grossly unfair results. "Good faith" also has found its way into jurisdictions other than those of civil law, as well as into the public international law of contracts and international law in general.

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Good Faith

Cited by 2 publications

References 7 publications

Good Faith in Construction Contract: A Common Law Perspective

Good Faith in Construction Contract: A Common Law Perspective

Encyclopedia of Law and Economics

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