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LL202 Commercial Contracts

LL202 Commercial Contracts. Chris von Csefalvay. Agenda for today . Session 5: Good faith Recap Good faith: extent and limits Searching for Ariadne’s thread Note please: ESSAYS DUE TODAY 1730 BST! E-mail to chris@ chrisvoncsefalvay.com. Recap. 1 thing you remember from the lecture.

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LL202 Commercial Contracts

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  1. LL202 Commercial Contracts Chris von Csefalvay

  2. Agenda for today • Session 5: Good faith • Recap • Good faith: extent and limits • Searching for Ariadne’s thread • Note please: ESSAYS DUE TODAY 1730 BST! E-mail to chris@chrisvoncsefalvay.com

  3. Recap • 1 thing you remember from the lecture. • 1 thing you did not understand about what was said in the lecture.

  4. 1 thing you SHOULD have remembered… • The general principle: no duty of good faith in English law. • No duty to negotiate: Walford v Miles [1992] 2 AC 128

  5. Valid lock-outs • JSD Corp Pte v Al Waha Capital PJSC [2009] EWHC 3376 (Ch): “determinable and reasonable duration” • Determined from an objective matrix of circumstances (okay… how?)

  6. Best endeavours clauses • Performance • Normally does not mean more than the standard adopted by a reasonable and prudent contractor (e.g. IChemE Red 13.1) • Negotiation • Little v Courage [1995] CLC 164 (CA): adding ‘best endeavours’ to an obligation to agree made no difference… it’s still unenforceable. • Multiplex Constructions v Cleveland Bridge [2006] EWHC 1341 (TCC): per Jackson J, reasonable endeavours to agree to renegotiate a works plan not enforceable

  7. Petromec v Petrobras • Per Longmore J: It would be a “strong thing to declare unenforceable a clause into which the parties have deliberately and expressly entered” – it would frustrate the intentions of honest men. • Recent approach: • Appeal against Longmore J’s dictum allowed • Barbudev v Eurocom[2012] EWCA Civ 548 – unenforceable • Shaker v Vistajet Group Holdings [2012] EWHC 1329 (Comm) - unenforceable

  8. However… • For misleading statements • Equitable rescission • Damages • Fraud/deceit • Negligent misstatement if responsibility assumed (Hedley Byrne liability) • Statutory misrepresentation • Collateral warranty • Failure to disclose information

  9. Breach of fiduciary duty • Continental analogy: uberrimaefidei • JPMorgan Chase v Springwell

  10. So, do these exceptions… • …show pockets of case law randomly littered about? • …show a cogent principle, which is that…? • …show a general idea of restitution/unconscionability?

  11. Reasons for the rule • How persuasive do you find any of these? • Which of them is the worst? • Which of them is the best? • Group exercise, 5’.

  12. Classroom discussion of questions • Please discuss each question in your group for five minutes. • Please present your findings.

  13. End of session 5 See you tomorrow morning in the same place. – Please do the recommended readings and think about the questions. ESSAYS DUE TODAY 1730 BST! E-mail to chris@chrisvoncsefalvay.com

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