What Does an Implied Duty to Act in Good Faith Mean?
At the outset, it is worth noting that it would appear that the proponents of good faith in contract law see it operating as an implied term in all contractual dealings. It would be a common law duty and not an equitable duty.[6] The implication would be independent of the parties’ intentions,[7] except that they would normally be free, by using express words, to exclude the implied term[8] and: recent decisions suggest that the implied duty of good faith and fair dealing ordinarily would not operate so as to restrict decisions and actions, reasonably taken, which are designed to promote the legitimate interests of a party and which are not otherwise in breach of an express contractual term.[9] The difficulties involved in implying terms in fact and in law have been thoughtfully discussed by Dr Elizabeth Peden in a recent article.[10] The scope of this article is limited to a consideration of a common law duty of good faith during contract performance. Whether contracting parties ought
