Hidden Duties in Contracts: Good Faith and Fair Dealing
Про приховані обов'язки в договорах: добросовісність та чесні відносини розповіла кандидат юридичних наук, доцент Чернівецький національний університет імені Юрія Федьковича Оксана Кіріяк під час заходу з підвищення професійного рівня адвокатів, що відбувся у Вищій школі адвокатури НААУ.
Матеріали заходів
03.12.2025

Лекторка докладно проаналізувала разом з учасниками приховані обов'язки в договорах, а саме:

1. Concept & Origins – Definition and roots. Поняття та витоки – Визначення та походження.

2. Comparative Perspectives – Common law vs. civil law. Порівняльний підхід – Англо-американська та континентальна системи.

3. International Context – Global rules of good faith. Міжнародний контекст – Світові стандарти добросовісності.

4. Practical Implications – Impact on contracts and disputes. Практичне значення – Вплив на договори та спори.

У рамках характеристики прихованих обов'язків в договорах акцентовано на наступному:

1. Concept & Origins – Definition and roots

Hidden duties are obligations that do not appear explicitly in a contract but arise from statutory provisions, judicial interpretation, trade usage, or the nature of the contractual relationship. Their purpose is to ensure that the contract functions as intended and to prevent a party from exploiting gaps or ambiguities.

The implied covenant of good faith and fair dealing is defined as a legal principle built into every contract, requiring parties to act honestly, fairly, and in a manner that does not deprive the other party of the intended contractual benefits. It prevents abuse of contractual rights and ensures performance aligned with the spirit, not just the letter of the agreement.

Types of implied duties:

  1. Implied-in-fact – inferred from conduct or context.

  2. Implied-by-custom – arising from industry standards (construction, IT, transport, finance).

  3. Implied-in-law – inserted automatically by statute or established doctrine, such as the duty of good faith.

These duties often appear “between the lines” and can be embedded through mechanisms such as:

  • further assurances clauses,

  • entire agreement clauses,

  • notices provisions,

  • recitals framing the intention of the parties,

  • incorporation by reference,

  • strategic omissions or standards required to give effect to the contract.

2. Comparative Perspectives – Common law vs. civil law

Common law jurisdictions (U.S., UK, Canada, Australia):

  • Good faith developed primarily through judicial interpretation rather than legislation.

  • The implied covenant exists even if not written.

  • Courts may imply the covenant in “relational contracts.”

  • Cases include:

    1. Fortune v. National Cash Register (U.S.) – employer terminated salesman to avoid paying commission; court applied the implied covenant.

    2. Yam Seng v. ITC (UK) – recognition of good faith obligations in relational contracts.

Civil law jurisdictions (Germany, France, Netherlands):

  • Good faith is expressly codified in statutes and therefore is a clear, legally binding obligation.

  • It is not implied by courts but built directly into the legal framework.

  • The duty applies broadly and systematically to contractual performance.

Key difference highlighted in the slides:

  • Written “good faith clauses” vs. the implied covenant:

Even if a clause is not drafted, common law still inserts the implied covenant.

Civil law does not rely on implication—it is part of the statutory structure.

3. International Context – Global rules of good faith

UNIDROIT Principles of International Commercial Contracts:

  • Contain an explicit requirement of good faith in negotiation, performance, and enforcement of commercial contracts.

  • Serve as a soft-law harmonizing instrument in cross-border business.

CISG (United Nations Convention on Contracts for the International Sale of Goods):

  • Also incorporates the general obligation of good faith.

  • Applies to international sales contracts and provides a unified framework for commercial dealings.

Thus, internationally:

  • Good faith is mandatory,

  • Both in negotiation and performance,

  • And reduces risks created by differences between domestic legal systems.

4. Practical Implications – Impact on contracts and disputes

1. Impact on Contract Drafting:

  • Good faith fills gaps and prevents exploitation of ambiguities.

  • Implied duties shape how clauses such as “Entire Agreement,” “Further Assurances,” or “Notices” function.

  • Recitals (“Whereas…” sections) help courts infer intent and thus implied obligations.

2. Impact on Negotiation:

  • The doctrine influences “agreements to agree” and warns about risks of vague drafting.

  • Strategic omissions may still generate implied duties to act reasonably or fairly.

3. Impact on Performance and Enforcement:

  • Prevents parties from acting in ways that deprive the other of expected contractual benefits.

  • Ensures cooperation and prevents sabotage of performance.

  • Courts will not use good faith to rewrite contracts or contradict express terms; its role is interpretative, not creative.

4. Litigation and Dispute Resolution:

  • Good faith is often invoked in disputes about termination, failure to cooperate, non-payment of commissions, or misuse of discretionary powers.

  • Key cases show how courts intervene to prevent abuses:

  1. Fortune v. NCR – termination in bad faith to avoid commission.

  2. Yam Seng v. ITC – recognition of good faith in long-term relational agreements.

5. Limitations:

The doctrine cannot impose obligations contradicting the contract. Courts will not create new terms—they only ensure existing ones are performed in good faith.