Gordon Drakes, Senior Associate at Field Fisher Waterhouse LLP
Gordon Drakes of Field Fisher Waterhouse LLP discusses recent legal developments relating to good faith which may affect your franchise agreements.
“The English law of contract is well known for not having a general duty of good faith and the approach to dealing with good faith situations in case law has been piecemeal, in line with the general development of common law. One of
the main reasons advanced for this is the uncertainty which would arise if a general duty of good faith was imported into contracts generally.
However, recent case law has reignited the debate over whether or not English law recognises a general duty of good faith in commercial contracts.
In a recent High Court case between Yam Seng Pte Limited (“Yam Seng”) and International Trade Corporation (“ITC”), the judge, Mr Justice Leggatt, held that a distribution agreement governed by English law contained an enforceable, implied obligation on the parties to act in “good faith”.”
