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In the context, good faith is viewed in the conception of the obligation of the parties to
cooperate with the proceedings of the negotiations, being standards of honesty and integrity
and the conformity with the right conduct for the benefit of each party. "Good faith" should
be regarded for the most part of loyalty to the negotiation and dissenting the behaviour of
bad faith (Furmston et al. 1998).
English law
In English law, there is no rule that requires the contracting parties to negotiate with the
principle of good faith. However, this does not mean that the contracting parties have the full
freedom to do what they want with regard to their contract relations. The conventional
regulation includes the ruling out of coercion; too much influence and deception. In addition
to, English law allows each party to cancel the negotiation before the contract ends. The legal
responsibility for pre-contractual actions is only obligatory with the consideration of
particular situations like falsified depiction or careless actions (Lando and Beale 2000).
In the midst of eighteenth century, English common law accepted the principle of good faith
in contractual dealings. However, the contemporary views about good faith, it is not
important to the English law in the sense of making it as a principle. In legal systems, mostly
the law of obligations acknowledges and puts into effect an intervening principle that in
creating and execution of contracts, the parties should act with accord to good faith.
Although this may appear to be literal, this does not imply that the parties should not betray
the trust of each other (Slapper et al. 2008). It profoundly reflects playing fair in order to
build just with each contracting parties. It is in perfect example of the principle of fair
dealing. English law has despised the term good faith but they have set the rules of playing
fair when it comes to the contract dealings. It plays a relevant rule in measuring the honesty
of the persons involved in the contract (Zimmermann and Whittaker 2000a).
Fair Dealing
The term "fair dealing" is used more than the term "good faith" in many English literatures
because it is more clear, whilst "good faith" appears unclear to the legal councils. The term
"fair dealing" stands for the observance of fairness to common law legal councils in a
profound manner. It is vital to emphasise that the definition of "good faith" as an objective
test to lawyers is integrated with the principles of civil law. Thus, it is more acceptable in
terms of contract dealings if the term "fair dealing" is used as it provides a clearer view of the
proper acts that both the contracting parties should make (Steyn 1997).
In United States, the Uniform Commercial Code or the UCC gives a statement that contracts
entails an obligation of good faith in its implementation. In the UCC, good faith refers to as
the truthfulness in dealing with contracts integrated with the commercial standards of fair
dealing. Consequently, American and English law both agree that the obligation of good faith
is not applicable to contractual dealings.
There are cases that contract may or may not pursue anymore. Cite the example of selling a
commercial land, but there comes a dilemma when the seller failed to notify that the land is
subject to be under the local office and make improvements for better use. This scenario is
not valid to cancel the contract because the land is still considered a commercial land. If the
transaction is made before the decision of the local office, the transfer then is valid and the
contract cannot be void.
Critical Analysis
Good faith in English law cannot be regarded as a legal justification for contractual dealings
considering the grounds discussed earlier. However, it still resides so a progression of
principles are still vindicated by the good faith principle even they have ratified in laws or
integrated in a conventional way. Other laws are no longer defensible after a short time by
good faith even if they are not codified. Good faith somehow reflects the ethical actions of
the contracting parties and still considerable to integrate with the legal systems in the
negotiation (Zimmermann and Whittaker p.676).
There is really an argument whether to accept or not the principle of good faith in contract
dealings. Good faith contains the substantive aspect but is restricted and covers a general
idea. The substantive aspect is integrated with the other two aspects and that is why its
principles are restrained. As such, in a contract dealing, a conclusion will reflect as an
application of the good faith principle in condition of its conformity to the open norm and
does not depend on other conventional standard (Harrison 1997). Facts about good faith
might seem to be vague and may contradict through the acts of good faith. The three aspects
are somehow based on the good faith principle but there arises a conflict in a certain level.
Good faith binds people in a way that ethical standards are taken consideration. It is only
recognised by the English law as a form of behaviour and not as a legal system to be applied
on the contract dealings. It is not legitimate enough to take responsibility on the interests of
the contracting parties.
Conclusion
Civil law systems might take the term "good faith" and apply it into contractual dealings but
not in a formal way. It is therefore agreeable that the English law does not recognise a
general duty of good faith in the sense of fair dealing between contracting parties. It is
justified that cases like these have to be supported by more judicial law systems. Since it
reflects a wide issue, it may somehow cause to outmode the concept and principles for the
solutions that are set to be in a more specific law. Good faith only acts as a guidance for the
contract dealings but cannot be integrated with the formal setting as law develops in due
time. In using this principle, it should be treated as a historical approach, but still yields
importance because disregarding the past cannot give the future a prolific solution.
Particularly, this notion gives reference for future use as law continues to expand and are
precisely codified. Thus, the use of good faith in contract dealings, specifically in English
law, is not acceptable but remains significant in each parties with regard to their actions and
negotiations.
Works Cited
Auer,M. 'Good Faith: A Semiotic Approach', ERPL 2002, 279 ff.
Cohen, N. Pre-contractual duties: Two freedoms and the contract to negotiate. In J. Beatson
and D. Friedmann, ed. Good Faith and Fault in Contract Law. Clarendon Press, Oxford,
1995
Fabre-Magnan, M. Duties of disclosure and French contract law: Contribution to an
economic analysis. In J. Beatson & D. Friedmann, Good Faith and Fault in Contract
Law. OUP, Oxford: 1995
Furmston, M., Norisada, T and Poole, J. Contract Formation and Letters of Intent, John
Wiley & Sons, Chichester, 1998.
Galgano, F. Diritto Privato. 3rd ed., CEDAM - Casa Editrice Dott. Antonio Milani, Padova:
1985
Harrison, R. Good Faith in Sales. Sweet & Maxwell, London, 1997
Kessler, F. and Fine, E. 'Culpa in contrahendo', Bargaining in Good Faith and Freedom of
Contract: A Comparative Study. Harvard Law Review 77(3):401-449, 1964
Lando, O. and Beale, H. Principles of European Contract Law - Parts I and II Combined
and Revised. Kluwer Law International, The Hague, London, Boston, 2000
Slapper, G; David Kelly (2008-07-15). The English Legal System. London: RoutledgeCavendish.
Steyn L.J., "Contract law: Fulfilling the reasonable expectations of honest men", (1997)
113 L.Q.R. at p. 438.
Whittaker, S and Zimmermann, R. Good faith in European contract law: surveying the legal
landscape.In R. Zimmermann and S. Whittaker, eds. Good Faith in European Contract Law.
Cambridge University Press , Cambridge, 2000
Wooldridge, M. and Jennings, N. Intelligent Agents: Theory and Practice. Knowledge
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Cambridge University Press , Cambridge, 2000
Zimmermann, R. and Whittaker, S.(b) 'Coming to Terms with Good Faith', in Good Faith in
European Contract Law, pp. 676 ff.