13 Is There a Duty to Negotiate in Good Faith?

Subject(s):

Third parties — Construction of contract — Formation of contract — Interpretation of contract — Performance of contract — Validity of contract

This chapter assesses the duty of good faith in negotiation. In general, even civilian systems which have long adopted notions of good faith performance have been much slower to accept notions of good faith negotiation. So all over the world the question of whether the parties should be under a duty to negotiate in good faith is very much at the forefront of the debate. The traditional view is that there is no general duty of good faith in negotiation. However, the doctrinal principles applied in England and Australia frequently serve to promote good faith. Those who wish to argue for a general rule of good faith, contractual or tortious, can find support in certain case law. But the mere fact of entering into negotiations does not create such a duty.