Good Faith in Franchising
Where are we now?
The English law of contract is well known for not having a general duty of good faith and the approach to dealing with good faith situations in case law has been piecemeal, in line with the general development of common law. One of the main reasons advanced for this is the uncertainty which would arise if a general duty of good faith was imported into contracts generally.
However, judgments in a number of recent cases have reignited the debate over whether or not English law recognises a general duty of good faith in commercial contracts, including franchise agreements.
This article will consider the line taken by the English Courts in these recent cases, starting with Yam Seng Pte Limited and International Trade Corporation ("Yam Seng"), followed by a look at the subsequent cases which cited the Yam Seng judgement and concluding with the first post Yam-Seng case for good faith in the context of franchising (Carewatch Care Services Limited v Focus caring Services Limited & Ors ("Carewatch")). This article will then propose a number of key lessons to be learnt.
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