A Comparison of ‘Doctrine of Good Faith’ Under UNIDROIT PICC and the Indian Contract Act 1872

Abstract

The concept of ‘good faith and fair dealing’ is one of the fundamental principles of contract law but its relevance under the UNIDROIT Principle of International Commercial Contract (PICC) and the Indian Contract Act, 1872 differs in several aspects. Another issue relating to this doctrine is related to the importance of the provisions which expressly mention Good Faith under PICC and Indian Contract Act, 1872, as mere mentioning of good faith does not make the concept of good faith and fair dealing a mandate. The ambit provided to good faith under PICC is twofold. It is broad with respect to the mandate and obligation it is providing and restrictive in terms of the jurisdiction. Another question that may arise is whether the UNIDROIT PICC is complete and could it serve as a model that countries like India may follow. Can we say that the concept of Good faith could have found an important place in Sec. 14 of the Indian Contract Act, which defines ‘free consent.’ India is a common law country hence a look at how the English legal system deals with the doctrine of Good Faith is also required.