Tag Archives: Good faith

Court finds veto right in share option agreement was discretionary and could not be exercised capriciously, arbitrarily or unreasonably

Where a share option agreement provided that the option could be exercised only with board consent, the High Court has ordered specific performance of the agreement despite the lack of board consent. The court held that the veto was discretionary, … Continue reading

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Court of Appeal considers implied variation and good faith in relation to contractual rights of termination

The Court of Appeal has upheld a decision granting summary judgment to a defendant in relation to an allegation that it had wrongfully terminated a distribution agreement. The court rejected arguments based on contractual construction, implied variation and implied duties … Continue reading

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No implied obligation of good faith in exercising contractual right of termination

The High Court has again considered the circumstances in which a duty of good faith will be implied into a contract, rejecting an argument that a party's contractual right to terminate a consultancy contract had to be exercised in good … Continue reading

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Court of Appeal finds innocent party could not affirm contract following repudiatory breach where defaulting party unable (not just unwilling) to perform

The Court of Appeal has upheld a decision that a party was not entitled to keep a contract alive for the purpose of claiming ongoing liquidated damages for delayed performance following its counterparty’s repudiatory breach: MSC Mediterranean Shipping Company S.A. … Continue reading

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Court of Appeal considers “all reasonable endeavours” obligation

The Court of Appeal has held that a party was not in breach of an obligation to use "all reasonable endeavours" to procure the grant of planning permission where that obligation was subject to a qualification regarding the circumstances in … Continue reading

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How far can you act in your own self-interest? The role of good faith in commercial contracts

The traditional starting point in English contract law is that parties are free to do what they like so long as they do not breach the agreed terms. But it is becoming increasingly common for parties to agree terms requiring … Continue reading

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High Court refuses to imply duty of good faith in relation to exercise of contractual right

In a decision earlier this year, the High Court refused to imply a duty of good faith in relation to a contractual right to amend a loan note instrument: Myers and another v Kestrel Acquisitions Ltd (Kestrel) and others [2015] … Continue reading

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Good faith principles applied to question of whether innocent party could keep contract alive following repudiatory breach

The High Court has held that a party was not entitled to keep a contract alive indefinitely for the purpose of claiming ongoing liquidated damages for delayed performance following its counterparty’s repudiatory breach: MSC Mediterranean Shipping Company S.A. v Cottonex … Continue reading

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High Court implies duty of honesty and integrity into vehicle recovery contract

In a recent decision, the High Court has implied a duty of "honesty and integrity" into a vehicle recovery contract: D&G Cars Ltd v Essex Police Authority [2015] EWHC 226 (QB). Whilst it remains clear that there is no general … Continue reading

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High Court implies duty of good faith into “relational” contract

In a recent case, the High Court has implied a duty of good faith into a long-term agreement between two commercial parties: Bristol Groundschool Limited v Intelligent Data Capture Limited [2014] EWHC 2145 (Ch). In doing so, the court endorsed … Continue reading

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