Honestly speaking, one of the biggest characteristics of English law is the certainty and predictability. The doctrine of good faith is too empty, which brings the uncertainty and unpredictability. So for a long time the English law is reluctant to admit that there is a vague fiduciary duty which have not described in details. But these days, a new trend worth pay attention to in the English case law is that the case law has limited recognized to the doctrine of good faith. Represented by Yam Seng Pte v. International Trade Corp Ltd , there are many other notable cases, such as Mid Essex Hospital Services NHS Trust v. Compass Group UK and Ireland Ltd (t/a Medirest) and TSG Building Services PLC v. South Anglia Housing Limited , etc
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5. ConclusionYam Seng v. International Trade Corporation case refers to a distribution agreement. After the breakdown of their relationship, Yam Seng terminated the agreement and claimed that the ITC breached an implied term of good faith. In the long run, England is one of jurisdictions which did not recognized the duty of good faith as an implied obligation of contracting parties. The court would not imply the duty of good faith into a commercial contract, this duty of good faith only specifically implied to relationships such as partnership, employment, agency, or insurance etc. However, Yam Seng v. International Trade Corporation case made a useful attempt. Mr. Justice Leggatt thought contracting parties have an obligation to comply with “other standards of commercial dealing which are so generally accepted that the contracting parties could reasonably be understood to take them as read without explicitly stating them in their contractual document”, and these generally accepted standards are key aspects of good faith. Mr. Justice Leggatt also noticed that relational contracts may require more communication and cooperation, the performance of contracting parties in the relational contracts are also predictable. To summarize, as stated in the targeted case of this essay, the new trend in the common law is, for the long-term contractual relationships, namely relational contracts which include joint ventures, distribution agreements, financing agreements, outsourcing agreements, etc., the contracting parties owe each other a duty of good faith in the performance of their contractual obligations.
Reference
Attorney General for Belize v. Belize Telecom Ltd [2009] UKPC 10Bhasin v. Hrynew [2014] SCC 71
Goldberg 168-05 Corp v. Levy, [1938] 9 NYS 2d 304
Mid Essex Hospital Services NHS Trust v. Compass Group UK and Ireland Ltd (t/a Medirest) [2013] EWCA Civ 200
TSG Building Services PLC v. South Anglia Housing Limited [2013] EWHC 1151Walford v. Miles [1992] 2 AC 128
Yam Seng Pte v. International Trade Corp Ltd [2013] EWHC 111
Claude D. Rohwer & Gordon D. Schaber (1997) Contracts (4ed). West Nutshell Series, p. 187.
Jean-Luc Soulier. (2016) Ordinance