Good Faith, PECL and Mixed Systems

Abstract

This paper considers the use of the concept of good faith in the Principles of European Contract Law (PECL) and argues that, while there is some inconsistency, it is mainly deployed in an over-arching and active way. This however contrasts with the way the concept has been used in the mixed jurisdictions of Louisiana, Quebec, Israel, Scotland and South Africa. Although in the first three, codified or semi-codified, systems, a general concept of good faith has only relatively recently been developed, the courts appear to use it in a relatively cautious way. In the latter two, uncodified systems, the concept operates in a more subterranean manner, possibly reflecting the incremental nature of development in a case law system. The paper argues that good faith should generally be seen as an underlying rather than an over-arching principle, informing and reflected in rules of law rather than providing means of escape from them. It is also suggested that good faith needs to be distinguished from public policy as a means of regulating contractual freedom.