In protecting your own interests in a contract dispute resolution
you have to always know where you stand. This means you need to assess your
position in relation to your written and oral obligations especially if
they have contractual force. In the inevitable heat of a contract dispute
resolution process you will face arguments about express terms and implied
terms where one such assertion could be about good faith.
What is good faith, basically?
Some would say there is no good faith in contractual dealings [see:
Mid-Essex Service NHS Trust v Compass Group UK and Ireland] whilst others
would not exclude the possibility and instead say it is an open question
[see: Commonwealth Bank v Barker]. Part of the problem is a lack of
agreement on what precisely that phrase / term means. For the time being it
is almost certain that the position will remain unclear in New South Wales
where some regard it as controversial. Professor Carter asserts that the
difficulty for those who contend it exists is that there is currently no
High Court authority that affirms its existence.
If parties wish to import duties of good faith then perhaps the better
course is to do so expressly in the contract. This can be done provided the
term is properly defined and the obligations of the respective parties are
spelled out. If that is not done then perhaps one side will argue lack of
certainty and acceptance of its existence as an implied term. It should
also be said that as a general rule parties are better off acting in good
conscience since the Courts will more readily believe participants who act
honestly and fairly towards others.
For an extra judicial view on good faith in Australian law, take a look at
published this past September by the Justice Kiefel AC of the High Court of
Australia, “Good Faith in Contractual Performance.”
Contact us http://www.litigant.com.au/contact today for more information
about your contractual dispute. We believe it is not always necessary to
see a large law firm to get sensible and reasonable advice. We are a phone
call away should you need legal advice from us.
This content does not purport to give legal advice. Readers must obtain
their own legal advice that applies to the particular circumstances of
their case, before taking any action at all.