The Sustainability Of Lord Ackner's Statement Nowadays

The particular focus of this essay is on how terms are implied. This is central because the courts intervene and impose implied terms when they believe that in addition to the terms the parties have expressly agreed on, other terms must be implied into the contract. Gillies argued that the courts have become more interventionist in protecting the rights of contracting parties thereby encroaching upon the notion of freedom of contract. The doctrine of freedom of contract is a prevailing philosophy which upholds the idea that parties to a contract should be at liberty to agree on their own terms without the interference of the courts or legislature. Implied terms can be viewed as a technique of construction or interpretation of contracts. It has been argued that the courts are interfering too much in their approach to determine and interpret the terms of a contract. The aim of this essay is to explore this argument further and in doing so consider whether freedom of contract is lost due to courts imposing implied terms. The essay will outline how the common law implies terms. The final part of the essay will examine whether Parliament, by means of a statute, or terms implied by custom restrict freedom in a contract. An overall conclusion on the issue will be reached.

According to the UCC (Uniform Commercial Code) “good faith” is the belief that those involved in a contract will act honestly and fairly. That is saying that those entering a contract will act in and honest and fair manner in regards to the contracts they are entering. The obligations of good faith are part of every contract under the UCC. They act as the framework for the parties entering a contract. An example of good faith is car insurance. A person pays monthly for car insurance with the understanding that their insurance company will cover a certain amount in damages if the car is involved in an accident. If after the car is involved in an accident they insurance company does not pay the amount agreed to for the damages they have not acted

Good faith has thus been defined as “an honest and sincere intent and purpose to explore all possibilities of settlement of the matters in dispute, until the exhaustion of all reasonable efforts and the arrival at a point where a definite decision is reached.”

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:

Australia has not yet committed itself to a definitive principle of good faith in contract law. Unlike the legal systems in Europe and the United States, Australia does not demand an explicit legal prerequisite of good faith to form a contract.[1] Decisions in different jurisdictions have however considered the validity of the values identified in the doctrine of good faith within contract law, such as loyalty, honesty and cooperation. Good faith is valuable because it provides confidence in the formation of contracts between two parties. However there are conflicting views and criticisms of the doctrine of good faith.

Defendant Liberty Mutual Insurance Company’s First Set of Interrogatories and Request for Production of Documents to Plaintiff Regarding Collateral Sources

The current Victorian laws on the implication of the duty of good faith in commercial contracts run in parallel with Commonwealth laws in this area. In both jurisdictions the law in respect to both the scope and nature of the duty of good faith is relatively unsettled. Judicial and jurisdictional discrepancies surrounding rulings on the duty of good faith is evident. This is the case even though the High Court of Australia has acknowledged the existence and potential scope of the duty of good faith as important issues It is yet to expressly consider the matter in detail . As such, “debate in various Australian authorities concerning the existence and content of the implied…duty of good faith and fair dealing” is commonplace. Each state’s courts have delivered varying judgments on the scope, interpretation and application of the implied duty of good faith in a commercial context. Victoria has diverged most notably from the NSW interpretation whereby Victoria generally implies the duty of good faith in fact rather than in law . Currently, there is much debate over what constitutes ‘good faith’. However, both jurisdictions have tended to agree on the conflated nature of the concepts of the implied terms of good faith and reasonableness and the obligation requiring parties to not act capriciously . The courts also tend to share a reluctance to conclude that commercial contracts are of the class which requires the universal implication of the duty of good faith . However,

The duty of good faith requires an insurer to act in fairness and honesty, compel full an frank disclosure, require notice of important obligations, necessitate avoidance of conflicts of interest and oblige a timely response to claim for indemnity. Addition of ss12-14 in the Act of insurance by implying the duty of utmost good faith as a term into the contract of insurance, established that the duty to act in good faith was for practical purposes, is mutual and applied to all aspects of the relationship between insurer and insured. But there is not a comprehensive definition of the duty of utmost good faith yet, therefore, the most authoritative proposition as to what the duty of good faith requires of an insurer is from Gleeson CJ and Cernan J in CGU Insurance Limited VAMP Financial Planning PTY

Another example can be found in the case, also Australian, of Spunwill Pty Ltd v. BAB Pty Ltd in which it was found that there is no real justification for excluding evidence of mutual intent simply because such evidence falls under ‘pre-contractual negotiations’. In his judgment, Santow J. said:

The law of contract in many legal systems requires that parties should act in good faith. English law refuses to impose such a general doctrine of good faith in the field of contract law. However, despite not recognizing the principle, English contract law is still influenced by notions of good faith. As Lord Bingham affirmed, the law has developed numerous piecemeal solutions in response to problems of unfairness. This essay will seek to examine the current and future state of good faith in English contract law.

In today’s English law, freedom of contract is one the foundation of contract law. The existence of freedom of contract requires three main considerations: the freedom to

Good faith is an intangible and inclusive term that encompasses a genuine sincerity or purpose without any wickedness or the desire to deceive others.

This paper tends to analyse and discuss the applicability, similarities and differences and does the concept of good faith becomes binding by virtue of application of The UN Convention on Contracts for the International Sale of Goods, the UNIDROIT Principles of International Commercial Contracts and the European Principles of Contract Law as the most important international instruments on contract law and will be summarize as follows

Obligation of good faith, the contract can impose an obligation of good faith in its performance or enforcement. From the case, if Zheng really refused to provided new account to Nike, we can doubt if he acted good faith;

This essay will evaluate the role of excluding pre-contractual negotiations from admissible evidence as part of the exclusionary rule in the interpretation of contracts. I will begin first by giving a brief overview of the exclusionary rule, focusing specifically on its background and its application to pre-contractual negotiations. Then I will then detail and critically evaluate the arguments made in favour of its inclusion in the exclusionary rule as well as the arguments made opposing it. I will conclude by arguing that despite the existence of such shortcomings, the benefits are persuasive enough to argue that pre-contractual negotiations should remain a part of the exclusionary rule.