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27 Int'l Bus. Law. 355 (1999)
Good Faith Obligations in Commercial Contracts

handle is hein.journals/ibl27 and id is 357 raw text is: Q0~1 '7~;; pm ri~ S 4111 in V S I C Agasha Mugasha* Faculty of Law, Australian National University Tfe law of contract is constantly evolving. There is now a clear trend to the effect that the contract document is not decisive of the rights and obligations of the contracting parties. Many courts and some legislatures are sending the message that there are certain fundamental values which govern all contracts; in particular, there is a duty on the part of contractors to act reasonably and fairly. In fact, the law can in certain instances require one contractor to put the interests of the other contractor ahead of its own. The particular avenues used by the courts and legislatures are the concepts of fiduciary duty, good faith and reasonableness.' Compendiously known as the 'warm fuzzies', these discretionary standards sound attractive, but smack of vagueness in their legal definition, substantive content, and scope of application. Each one gives the feeling of commercial uncertainty, which feeling may or may not be justified. International Business Lawyer September 1999 Good faith has long been known to the common law, but there is a clear trend to expand its meaning and scope of application. Its implication in contracts seems to be on the increase on both the international and domestic scenes. The main issue in the good faith debate is whether the duty of good faith should generally be implied in contracts. The corollary questions are the meaning of 'good faith', and whether the duty can be applied so as to override contractual expressions. This article discusses good faith in commercial contracts' in the paradigm situation where the contractors are sophisticated companies or institutions and contract at arm's length. There is a justifiable expectation in such contracts' for commercial certainty and legal predictability. Generally speaking, commercial certainty points to the parties' need to know where they stand by determining the business terms of their contract. It reinforces the idea of freedom of contract, whereby

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