variously by the courts according to how they have perceived it from time to time to
epitomize fairness in exceptional circumstances. Finally, we shall discuss if the
absence of good faith in maritime contracts creates chaos and what parties could
do to avoid it.
2 Analysing Good Faith: Through the Looking Glass
of Contract Law
The basic elements of honesty, fair dealing and trust constitute certain essential
ingredients of good faith. In all the vagueness of its definition, good faith is at least
known to comprise “duty to disclose” and “making true representations” as in
marine insurance law. Although the duty of good faith is recognized in marine
insurance contracts, there exists a perception that this phenomenon is not recognized
at all in contracts generally, at least in common law jurisdictions.
5 The ethos of
individualism underpins the classical theory of contract law, which focuses predominantly on freedom of contract.
6 According to certain scholars, the doctrine of good
faith emerges outside the terms of the contract apart from the fact that it runs counter
to the individual autonomy critical to a contract.
7 Good faith, a concept emerging
from altruism, is perceived to be anti-individualistic to business pursuits and
requirements. Scholars have also pointed out:
the danger in any overenthusiastic and indiscriminate embracing of good faith notions and
have maintained that a deterioration of the law of contract into “well -meaning sloppiness of
thought must be avoided so as not to disregard the fundamental moral principle of responsibility for one’s own actions.”
8 However they acknowledge that good faith and culpa in
contrahendo, used with restraint, are ‘residual’ categories whose existence vital to an open
system of contract justice and to a restriction of contractual freedom in the interest of its own
preservation.
9
Furthermore, the economically-oriented criticisms of good faith are the entire set
of arguments that see a possible expansion of the notion as economically detrimental.
10 Good faith brings in a fear-meter in the legal wall of contracts. However, this
“slippery slope” argument against good faith is questionable. The essential X and the
inevitable Y are what the legal telescope can vaguely envision at this moment. The
5 Ahmed (2010).
6 Davies (2002).
7 TSG Building Services PLC v South Anglia Housing Limited [2013] EWCH 1151 the High Court
found that no good faith obligation applied to an exercise of the right to terminate set out in the
contract. The High Court considered that the contractual requirement that the parties “act reasonably” and “work together individually and in the spirit of trust, fairness and mutual cooperation” did
not provide a basis for implying a duty of good faith.
8 Kessler and Fine (1964).
9 Ibid.
10 Colombo (2012), p. 24.
Good Faith in Maritime Law Contracts
117
epitomize fairness in exceptional circumstances. Finally, we shall discuss if the
absence of good faith in maritime contracts creates chaos and what parties could
do to avoid it.
2 Analysing Good Faith: Through the Looking Glass
of Contract Law
The basic elements of honesty, fair dealing and trust constitute certain essential
ingredients of good faith. In all the vagueness of its definition, good faith is at least
known to comprise “duty to disclose” and “making true representations” as in
marine insurance law. Although the duty of good faith is recognized in marine
insurance contracts, there exists a perception that this phenomenon is not recognized
at all in contracts generally, at least in common law jurisdictions.
5 The ethos of
individualism underpins the classical theory of contract law, which focuses predominantly on freedom of contract.
6 According to certain scholars, the doctrine of good
faith emerges outside the terms of the contract apart from the fact that it runs counter
to the individual autonomy critical to a contract.
7 Good faith, a concept emerging
from altruism, is perceived to be anti-individualistic to business pursuits and
requirements. Scholars have also pointed out:
the danger in any overenthusiastic and indiscriminate embracing of good faith notions and
have maintained that a deterioration of the law of contract into “well -meaning sloppiness of
thought must be avoided so as not to disregard the fundamental moral principle of responsibility for one’s own actions.”
8 However they acknowledge that good faith and culpa in
contrahendo, used with restraint, are ‘residual’ categories whose existence vital to an open
system of contract justice and to a restriction of contractual freedom in the interest of its own
preservation.
9
Furthermore, the economically-oriented criticisms of good faith are the entire set
of arguments that see a possible expansion of the notion as economically detrimental.
10 Good faith brings in a fear-meter in the legal wall of contracts. However, this
“slippery slope” argument against good faith is questionable. The essential X and the
inevitable Y are what the legal telescope can vaguely envision at this moment. The
5 Ahmed (2010).
6 Davies (2002).
7 TSG Building Services PLC v South Anglia Housing Limited [2013] EWCH 1151 the High Court
found that no good faith obligation applied to an exercise of the right to terminate set out in the
contract. The High Court considered that the contractual requirement that the parties “act reasonably” and “work together individually and in the spirit of trust, fairness and mutual cooperation” did
not provide a basis for implying a duty of good faith.
8 Kessler and Fine (1964).
9 Ibid.
10 Colombo (2012), p. 24.
Good Faith in Maritime Law Contracts
117