Good faith in construction contracts
Good faith in construction contracts

The following Construction practice note provides comprehensive and up to date legal information covering:

  • Good faith in construction contracts
  • Express provisions in construction contracts
  • Yam Seng—a high water mark?
  • The approach to good faith since Yam Seng
  • Key case law post-Yam Seng

This Practice Note considers if and when a duty of good faith may be implied into a construction contract, and also looks at some of the standard form construction contracts which contain express obligations to act in good faith, including their effect on the parties’ obligations.

It is a long established principle that there is no general duty of good faith in English law (unlike many other legal systems). There are only very limited categories of contract where such a duty applies, including certain insurance and employment contracts and fiduciary relationships.

A universal duty to act in good faith will not therefore automatically be implied into a construction contract. Several standard form construction contracts include express obligations to act in a spirit of good faith, but, as this Practice Note considers, it is likely that this would only have limited effect on the parties’ obligations.

The case of Yam Seng seemed as if it might open the door to introducing a general implied duty in commercial contracts for the parties to act in good faith. This case was part of a string of cases in the same year which reviewed the principle of good faith and suggested that in narrow situations, in the absence of express contractual provision, a duty to act in good faith might be implied in respect of a particular obligation, but inevitably decisions

Popular documents