Chapter 20 Self-test questions

. Good faith as a general, organising legal principle has been explicitly adopted in which of the following legal systems?

German law.

English law.

Spanish law.

Italian law.

. Why has English law not explicitly recognised a general organising principle of good faith in commercial contracts?

Companies do not deserve protection.

Commercial parties are characteristically viewed as adversaries who can ruthlessly pursue their own self-interest.

Commercial contractors are better protected by the Consumer Rights Act 2015.

Only consumers can be protected by duties of good faith.

. Which of the following options is an argument in favour of recognising good faith as a general principle of English law?

The law should favour clear and certain rules.

The law should strive to be just and fair and reflect what reasonably parties expect.

Outside the criminal law, parties should be free to pursue their own self-interest.

Parliament has legislated to protect weaker parties.

. Can one party compel another to enter into a contract in good faith?

Yes.

No.

. Why might parties desire an enforceable principle of good faith in contractual negotiations?

It would bring coherency to the law.

A party may not wish to commit time and resources to a negotiation if only for the other party can simply walk away without consequence.

To ensure that contracts are always concluded quickly.

There is no good reason in favour of a general principle of good faith.

. Why did Teare J hold that a clause that disputes should be settled 'by friendly discussion' was enforceable in Emirates Trading Agency LLC v Prime Mineral Exports Private Ltd?

The facts were identical to those in Walford v Miles.

Walford v Miles was narrowed to only have effect in contractual negotiations, rather than the resolution of disputes.

The case was more similar to one of duress than the facts of Walford v Miles.

Teare J did not provide a reason to enforce the clause.

. Will a clause stating that the parties will perform in 'good faith' be given effect?

Yes.

No.

. Select the correct response from those given below.

Good faith terms must be found in legislation only.

Since the courts will give effect to express terms imposing a duty of good faith, there is no reason why a court should not give effect to a similar implied term.

Even though the courts will give effect to express terms imposing a duty of good faith, there is no circumstance in which a court would give effect to a similar implied term.

Good faith terms must be implied terms.

. Into which type of contract does it appear that the courts are more willing to imply terms of good faith?

Contracts for the sale of goods.

Shipping contracts.

Relational contracts.

All types of contract.

. Why might the Supreme Court have held in Braganza v BP Shipping that the employer owed a duty of good faith to the employee?

Duties of good faith are always owed in contractual relationships.

The employer-employee relationship is a fiduciary one.

The employer was able to exercise contractual powers and make decisions that affect the interests of the employee.

The employee behaved negligently.

. The concept of good faith is well-defined and has a concrete meaning in all situations. True or false?

True.

False.

. How will the content of implied duties of good faith be determined?

By statue.

By reference only to existing case law.

By reference to the context around the contract.

In the manner preferred by the innocent party.

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