What Is the Current Laws Relating to the Implication of the Duty of Good Faith into Commercial Contracts in Victoria?

1514 WordsJan 31, 20186 Pages
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,

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