ABSTRACT
The courts have provided structure to the principle as applied to insurance contracts, by identifying rules and prohibitions that apply as a matter of law, or, in some circumstances, equitable doctrines, all in the name of good faith. The development of the duty of good faith therefore is at odds with the disinclination of the courts to recognise a general obligation applicable to all contracts requiring the parties to exercise good faith in all situations. The common law duty has developed and is the origin of the duty enshrined in the codifying legislation of the Marine Insurance Act 1906. The manner in which the terms of the policy of insurance are to be interpreted is the same as that which applies in respect of all insurance contracts, save that the particular obligation may be construed in a given case in light of the necessity to preserve good faith.
