good faith and USA

The concept of good faith has existed for thousands of years in Western civilization. Indeed, it has been asserted that the concept is one of the bases of those civilized society. The ancient Greeks recognized something similar to the notion of bona fides as « a universal social norm governing the relationships of its citizens. »For their part, the Romans converted the notion into a basis for legal action; Roman jurists incorporated the notion into the essence of « a number of legal rules defining the obligations in normal commercial transactions . . . . » The notion played an especially important role in the enforcement of informal consensual contracts in classical Roman law.

The concept has also found its way into American commercial law. A majority of them jurisdictions recognize the concept as a matter of case law. Fifty of the 400 Code provisions expressly mention good faith. Article 2 of the Code, devoted to sales, includes 13 sections explicitly using good faith standards. The Code’s general good faith provision, § 1-304, announces: « Every contract or duty within the Uniform Commercial Code imposes an obligation of good faith in its performance and enforcement. » Moreover, if one can take the broad language in some of the judicial opinions at face value, the obligation has meaningful substantive content; many opinions contain sweeping language to the effect that the obligation precludes a contracting party from taking any action that would destroy or impair the other party’s contractual rights or benefits. 

: 11 Jan 2011 13:36 |  Comments (0) |  Report a problem