The Implied Duty of Good Faith

1
The Implied Duty of Good Faith

• With reference to Service Station Association v
  Berg Bennett Federal Court of Australia 1993

2
Why should a duty of good faith be recognised?

• the most widely prescribed standard of conduct
  globally for contracting parties. (Cheshire and
  Fifoots Law of Contract, 2002)
• Reasons
• Widespread use in other jurisdictions.
• Acknowledge direct relevance of good faith and
  fair dealing to contractual relationships.

3
Service Station v Berg Bennett FCA 1993

• Expressed concerns related to the implied duty of
  good faith. These include
• Licence for judicial or juror intuition
• Other existing doctrines
• Lack of clarity associated with concept
• Role of community expectations

4
The state of the law in Australia

• Renard NSW CA 1993 binding law in NSW.
• Case of implied duty of good faith yet to be
  heard by HCA.
• Future developments to look out for
• Which contracts a duty of good faith will be
  implied
• The ambit of the duty
• The ability of the parties to contract out of the
  implied duty.