Good Faith in Australia Law Essay

1881 Words Aug 28th, 2008 8 Pages
Introduction

Since the early 1990s, Australian judicial system has experienced a great flux revolving around the notion of good faith in the performance the enforcement of contracts. The leading case Renard Construction (ME) Pty Ltd v Minister for Public Works (Renard) along with Preistly JA’s judgment commenced the controversial introduction of universal obligation of good faith in all contracts. Such introduction was also confronted by the opposing force of the more conservative judgments, such as those of Meagher JA in Renard and Gummow J in Service Station Association v Berg Bennett & Associates Pty Ltd . In order to correctly assess the extent to which the High Court of Australia should recognize that in all contracts, parties
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Importing legislation from a nation of dissimilar jurisprudential background is likey to create inconsistency in our current legal framework. Not only is the notion of good faith irreconcilable with existing common law, the concept itself is vastly uncertain and open to interpretation. It has been criticized that the misapplication of good faith in contract in US has created a state of confusion leading to irreconcilable decisions. The definition of good faith in US has largely been uncertain; it even has been referred as ‘mystery’ . The illusory nature of good faith will have a negative impact on our established legal system:

The predictability of the legal outcome of a case in more important that absolute justice……..and if that means that the outcome of disputes is sometimes hard on a party we regard that as an acceptable price to pay in the interest of the great majority of business litigants.

Certainty is undoubtedly one of the most fundamental concepts of our legal system, without it the system loses it efficiency, justice and creates unnecessary litigation. Such uncertainty would increase the difference between the rich and the poor, tilting the balance towards the
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