G is for Good Faith

Good Faith is one of those terms people bandy around all the time on construction sites.

PMs and commercial people love to talk about acting in, ‘Good Faith‘ (or ‘Bona Fides’ if they went to school with Boris Johnson). But does it actually mean anything? Can you bring an action against someone for not acting in ‘Good Faith’?

From what we can tell, probably not in England, Wales, Scotland or Northern Ireland, or places that have a ‘common law’ system (mostly ex British colonies)… Why? Because it doesn’t really exist. In the USA, it seems it has been written down in law in the ‘Restatement (second) of Contracts’. In most ‘Civil Code’ countries (most of continental Europe, the Gulf region, etc) there is an express reference to ‘Good Faith’ in their legal codes.

However, the recent post office ‘Horizon’ cases in the UK might have changed things a little, as indicated by this article. So what does it mean? The Post Office cases set out a long list of criteria (of course they do). So it might not be easy to meet all or any of the criteria. Indeed, would those criteria even apply in construction contracts?

As far as we know, none of the NEC contracts include reference to ‘Good Faith’ though they do mention ‘mutual trust and cooperation’. Many have argued that is ‘Good Faith’. The JCT uses the term, but many have argued it might not be enforceable, as it has no clear meaning.

So what is it? In the UK, we still don’t really seem to know. Probably best steer clear until someone does.