ABSTRACT
Courts in common law countries have reached different conclusions about whether there is, or should be, an implied obligation of good faith in the performance of contracts. All agree that good faith does not apply to the negotiations phase unless the parties explicitly impose such an obligation on themselves. Notable jurisdictions that have adopted an implied obligation of good faith include Australia, Canada and the United States, but the scope of the obligation is not exactly the same in each jurisdiction. Most courts seem to agree that the implied obligation does not create any new, separate substantive duty but is an aid to the construction and application of the existing contract. The English courts and others that tend to follow English precedents have refused to adopt the notion of an implied obligation of good faith, but the results in many cases in those jurisdictions are not dissimilar to the results in common law jurisdictions that have adopted the concept. The methodology is different, and the tendency is to rely more on pragmatic analyses of relationships and contexts. In some areas, especially international trade, it is possible to see the effects of international influences as parties seek greater uniformity and predictability in cross-border transactions.
