Duty of good faith not implied in agency agreement

ACER INVESTMENT MANAGEMENT v MANSION GROUP [2014]

This case involved the question of whether a duty of good faith should be implied into a non-exclusive agency agreement. On the face of it an agency type agreement ought to be a prime candidate for a duty of good faith but in this particular case the Court said the answer was ‘no’. This provides additional evidence that the Courts are reluctant to imply such a duty unless certain characteristics exist.

Background:

An overriding duty of ‘good faith’ between contracting parties is a concept imposed by law in many continental European jurisdictions but not one which is generally implied under English law (at least not in those terms). The English Courts have accepted the application of ‘good faith’ principles in certain so-called ‘relational’ contracts which require a high degree of co-operation based on mutual trust and confidence, such as joint ventures and long-term distributorships.

Facts:

Decision:

If there had been a duty of good faith, was it breached?

Points to note:

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