Law 5110 Study Guide - Quiz Guide: Unfair Contract Terms Act 1977, Uberrima Fides
Document Summary
Norm reasonableness and fairness, unlike subjective good faith, is the norm for the contracting parties: it sets a standard of conduct that requires each party to consider the interests of the other party. This means that it depends on the circumstances of the case how the norm is applied, giving much discretionary (flexible) power to the courts. Civil law courts have often used the good faith provision to break open" contracts the enforcement of which they deemed grossly unfair. Courts can then use the good faith provision to keep the law in sync with societal developments. Danger the freedom that the courts allow themselves can be seen as contradicting with the separation of powers. 3 functions of good faith: supplementation allows a court to fill gaps in the party agreement. Good faith can give rise to a variety of supplementary duties that arise under the contract; duties of information, cooperation, protection, loyalty, disclosure etc.
