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Insight

Keep it nice! Co-operating in good faith

Emily Parris
08/08/2012
Mutual obligations to "co-operate in good faith" are common in commercial contracts to set the tone of the relationship and encourage the right behaviours. But what does the obligation mean in Mutual obligations to "co-operate in good faith" are common in commercial contracts to set the tone of the relationship and encourage the right behaviours. But what does the obligation mean in practice?

That depends on the type of contract and the circumstances.  For example, in a recent High Court case involving a long term facilities management contract for an NHS Trust, the court ruled that the obligation required the parties to work together to resolve problems and to not take unreasonable actions which might damage their working relationship and undermine the purpose of the contract.    It's likely that the same obligation in short term contract without the same "public benefit" element would have a less onerous meaning.

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