International Construction Law Review
Good faith in English construction law – what does it mean, and does it matter?
Professor David Mosey PhD1
(The following paper is based on a presentation delivered in Frankfurt on 15 May 2015 to a conference of the Anglo-German Construction Law Platform2)
INTRODUCTION
This paper will examine the ways in which an express or implied obligation to act in “good faith” is viewed by the English courts and whether, particularly in the construction sector, there are other means to achieve the same objectives as those that may be intended by a good faith obligation.
Firstly, what can the term “good faith” mean to the English judiciary? For example, where expressly agreed, good faith has been defined by Mr Justice Vos as an obligation:
“to adhere to the spirit of the contract;
to observe reasonable commercial standards of fair dealing;
to be faithful to the agreed common purpose; and
to act consistently with the justified expectations of the parties”3.
Although this may appear a wide-ranging definition, its impact was limited by Mr Justice Vos adding that “it might be difficult to understand how, without bad faith, there can be a breach of a duty of good faith, utmost or otherwise”4. Even without this qualification, the wording of the definition invites further questions, for example:
- what is the “spirit of the contract” and how can the judiciary discover and enforce it?
- what are “reasonable commercial standards” and where do you find them?
1Professor David Mosey is Director of the Centre of Construction Law and Dispute Resolution at King’s College London and was for 20 years head of projects and construction at Trowers and Hamlins LLP where he is now a consultant. He is “Lead Mentor” for the UK Government on a series of trial projects testing “Two Stage Open Book” procurement and is principal author of the “PPC” suite of partnering and alliancing contracts published by the Association of Consultant Architects and the Association for Consultancy and Engineering.
2Additional case law has been added from the presentation at the same conference by Shy Jackson of Pinsent Masons, whose contribution is gratefully acknowledged.
3CPC Group Ltd v Qatari Diar Real Estate Investment Company [2010] EWHC 1535 (Ch), following Morgan J in Berkeley Community Villages Ltd v Pullen [2007] EWHC 1330 (Ch).
4CPC Group Ltd v Qatari Diar Real Estate Investment Company [2010] EWHC 1535 (Ch).
Pt 4] Good Faith in English construction law
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