A Doctrine of Good Faith in New Zealand Contractual Relationships
Degree GrantorUniversity of Canterbury
Degree NameMaster of Laws
The majority of established legal systems are predisposed to the express recognition of good faith in contract. The apparent pressure for harmonisation of contract law arising from globalisation and political union will necessitate the Anglo-Commonwealth common law countries addressing their historical resistance to the observance of a general obligation of good faith. Accordingly this thesis appraises whether there is a requirement for a universal doctrine of good faith in New Zealand contractual relationships. The manuscript focuses on a prospective common law doctrine operating primarily as a rule of construction. It identifies the limits of such a judicial doctrine including its probable lack of application to non-contractual dealings and the likely need for a legislative duty if contracting parties are to be precluded from excluding the obligation. The characteristics of the subject doctrine are explored including the potential definition and uses of good faith. Whilst it is shown that good faith serves an important role in contract law, the analysis reveals that there is no current requirement for an express doctrine within New Zealand. The entrenched ‘piecemeal’ approach synonymous with Anglo-New Zealand contract law is not demonstrably deficient when gauged against the reasonable expectations of contracting parties. The current methodology is preferred to a general, unfamiliar and uncertain good faith principle which is likely to be reduced to equate with the existing New Zealand law in any event. Further, duties consonant with good faith may enhance economic efficiency but not in some instances. Good faith is therefore best imposed in specific circumstances rather than as a universal doctrine. Likewise, there is insufficient evidence to suggest that New Zealand is impaired in the international arena due to a lack of good faith despite pressure for New Zealand to accord with widespread overseas practice. The principle is of minimal utility in international trade where commercial certitude is paramount. Although an imperfect exemplar, the unresolved issues pertaining to contractual good faith in domestic American law confirms the identified reservations associated with the subject doctrine.