Duty of good faith did not oblige a party to give up its contractual rights (Essex County Council v UBB Waste)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Relational contracts and the implied duty of good faith
• Implied term limiting the right to terminate
• Expert witnesses and the importance of checking conflict
• Case details

Article summary

Commercial analysis: The court found that Essex County Council (the Authority) were entitled to terminate a Private Finance Initiative (PFI) contract where the contractor was unable to pass acceptance tests. In particular, the judgment considered a number of issues with general commercial relevance, including relational contracts and the implied duty of good faith, whether there was an implied time limit for exercising termination rights and the independence, impartiality and objectivity of expert witnesses. Written by Antony Smith, partner, and Emily Hunt, trainee solicitor, at Beale & Company Solicitors LLP.