Good Faith Performance and Commercial Reasonableness under the Uniform Commercial Code
![handle is hein.journals/uclr30 and id is 680 raw text is: GOOD FAITH PERFORMANCE AND COMMERCIAL
REASONABLENESS UNDER THE UNIFORM
COMMERCIAL CODE*
E. ALLAN FARNSwORTHt
PROFESSOR GUTTERIDGB, writing of the codes of civil law countries, has
elegantly described their important general concepts as overriding and
super-eminent principles.' This is a propitious moment to revisit two
of the general concepts of the Uniform Commercial Code-those of good
faith and commercial reasonableness. For roughly a decade we were treated
to the discussions that attended the drafting of the Code. For roughly a
decade we have been subjected to debate on its merits. The Code is now well
on its way to adoption throughout the United States. But it remains to be seen
whether it will succeed as a coherent and integrated codification rather than
just a collection of related articles-whether the whole of the Code is any-
thing more than the sum of its parts-whether the Code has any truly over-
riding and super-eminent principles.
Let me first outline the Code's provisions on this topic. Because the
numerology of the Code has been known to produce a syndrome among
lawyers like that caused by all-digit dialing among telephone subscribers, I
shall refer to the Code sections by description in preference to number. The
key section is the general obligation of good faith2 contained in Article 1, the
Code's General Provisions. It declares that, every contract or duty within
this Act imposes an obligation of good faith in its performance or enforce-
ment. The comment states that This section sets forth a basic principle
running throughout this Act. The general definition of good faith, also con-
tained in Article 1,3 defines good faith to mean honesty in fact in the con-
duct or transaction concerned. Article 2, the Sales article, however, contains
a special merchant's definition of good faith under which good faith in
that article means honesty in fact and the observance of reasonable com-
* This article is based on an address delivered at the conference on the Uniform Com-
mercial Code held at the University of Chicago Law School on November 1, 1962. I wish to
express my appreciation to Professor Soia Mentschikoff and Professor William E. Hogan
for their suggestions during revision of the manuscript for publication.
f Professor of Law, Columbia University School of Law.
I GUrTERHIGE, COMPARATIVE LAW-AN INTRODUCTION TO TBE CoPARATrvE METHOD
op LEGAL STUDY AND RESEARcH 94 (2d ed. 1949).
2 UNIORM COMMERCIAL CODE § 1-203 [hereinafter cited as UCC when referring to the
1958 Official Draft].
3 UCC § 1-201(19).](ViewImageLocal?handle=hein.journals/uclr30&div=43&collection=journals&method=preview&ext=.png&size=3)
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Good Faith Performance and Commercial Reasonableness under the Uniform Commercial Code
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