Duty of good faith meaning

Basic terms At the outset, assess whether an overage arrangement is right for the deal. Your client might be better served by agreeing a higher purchase price or entering into a conditional contract instead. Overage provisions can be intricate and costly to negotiate. If overage will apply, check that the terms reflect the buyer’s intended use of the site. the overage period (note that, from 6 April 2010, the rule against perpetuities does not apply to most commercial interests and, if no period is specified, there is a risk the agreement could be perpetual) the property that will be subject to the overage any individual units to be sold or built, making clear whether parking spaces and other ancillary areas are included within a unit for the overage calculation Include a ‘good faith’ clause, as this may help in the event of a dispute...

Emagine Films Ltd v Mister Smith Entertainment Ltd and another company [2019] EWHC 2085 (Ch) (30 July 2019) What are the practical implications of this case? This decision underlines how difficult it is to legislate for every eventuality in preliminary papers for complex deals, and how implied terms can be used to address unforeseen gaps. An unanticipated issue arose after the term sheet was signed: the producer declined to accept terms consistent with those originally contemplated. The problem did not lie in the term sheet anticipating further formal documentation; that feature did not, by itself, render the arrangement uncertain or ineffective. Rather, the difficulty stemmed from the producer’s refusal to agree to fundamental matters that both Mister Smith and Emagine had assumed would be accepted. In those circumstances, the court was willing to imply a term that brought the term sheet contract to an end. The outcome illustrates that, where expectations central to a term sheet are not met, an implied term may operate to terminate the...

Banking & Finance—February 2026 case round-up CR Construction (UK) Co Ltd v Barclays Bank Plc (Northern Gateway (FEC) No 7 Ltd, intervening) [2026] EWHC 202 (TCC) Performance bond—injunction to restrain payment This matter concerned a contractor’s bid for an interim injunction preventing a bank from honouring the employer’s call under a performance bond that secured the contractor’s payment liabilities under a construction contract. The employer brought the contract to an end for alleged breaches by the contractor. The contractor disputed those breaches, treated the termination as repudiatory, and accepted that repudiation. The High Court refused the application, restating that an injunction restraining a paying bank will only be granted where there is clear evidence of fraud, which was not advanced in this case. The court also rejected the argument that the employer’s repudiatory breach discharged the bond, finding that the bond’s standard savings clause was sufficiently broad to encompass repudiatory termination, so the bond remained enforceable…

Editor’s note Welcome to the second edition of the Public Law case law quarterly for 2024, which reviews developments from the second quarter of the year. This instalment begins with a successful first instance judicial review of the Conservative government’s Carbon Budget Delivery Plan. It then turns to a first instance decision that the High Court lacks jurisdiction to entertain a judicial review of the Upper Tribunal’s (UT) refusal of permission to appeal from the First-Tier Tribunal, a landmark ECtHR judgment on climate change, and the Supreme Court’s declaration that section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A 1992) is incompatible with the Article 11 Convention right. We also spotlight a housing judicial review where a council’s decision was found unlawful due to discrimination and breach of the Public Sector Equality Duty (PSED), together with unsuccessful first instance human rights challenges concerning ‘the strictest school in Britain’ and its approach to a council’s offer of accommodation away from a faith school, and further challenges...

Practice Note This Practice Note consists of two strands created to help dispute resolution practitioners remain up to date with developments in case law that affect their field, or which influence civil litigation procedure more generally: selected forthcoming appeals to the Supreme Court are highlighted below; see Key forthcoming appeals to the Supreme Court—2022 summaries of significant appeal decisions in England and Wales (ie rulings of the Court of Appeal and Supreme Court and, where appropriate, certain judgments of the Competition Appeal Tribunal, Judicial Committee of the Privy Council, Court of Justice of the European Union), and ECtHR, which we have covered; see: Key forthcoming appeal cases—2022 You can navigate this content using the table of contents in the left-hand margin. Alternatively, search this tracker using [CTRL]+[F]. This material is not intended to be a comprehensive register of every appeal or major decision relevant to dispute resolution practitioners. Key forthcoming appeals to the Supreme Court—2022 Tort and negligence ...

Directors’ duties—fundamentals For the first time, the key duties of directors formulated by the courts were expressly set out in statutory form in sections 171–177 of the Companies Act 2006 (CA 2006), thereby consolidating existing judge‑made principles. A full account of these statutory obligations—referred to as the general duties—can be found in Practice Note: Directors’ duties—fundamentals. The first four general duties are set out below: a duty to act in line with the company’s constitution and to use conferred powers solely for their proper purposes as intended by that constitution a duty to act, in good faith, in the manner the director believes is most likely to promote the company’s success for the benefit of all members collectively, while, in doing so, having regard to various factors a duty to exercise independent judgment a duty to exercise reasonable care, skill and diligence With respect to the fifth, sixth and seventh general duties, consult Practice Note: Directors’ duties—directors’ interests: CA...

Duty to distribute to the correct beneficiaries When a trust concludes, trustees are obliged to transfer the trust property to the proper beneficiaries. Misdistribution exposes trustees to potential liability for breach of trust; however, they may ask the court to grant relief where their conduct was honest and reasonable... Relief for honest and reasonable conduct If the court considers that a trustee is, or could be, personally liable for a breach of trust, but finds they acted honestly and reasonably, and should fairly be excused both for the breach and for not seeking the court’s guidance, it may relieve them from personal liability, in full or in part. ‘Honestly’ signifies acting in good faith, while ‘reasonably’ reflects prudent behaviour. This relief is discretionary, and in exercising that discretion the court will weigh the interests of both trustees and beneficiaries when deciding whether, and to what extent, the breach should be excused...

Definitions Core expressions include Additional Service, Anti-bribery Laws (including BA 2010), Codes of Practice, Legislation, Occupier, Occupation Agreement, Services, Termination Event, VAT and Working Day. Appointment and Duties The Owner appoints an independent Property Manager to provide the Services with appropriate skill, care and diligence, in line with good estate management and the Codes of Practice, always acting in the Owner’s best interests. Authority and Fees The Property Manager may act for the Owner within approved limits, engage specialists where reasonably necessary, and must obtain consent for material matters. Fees track recoverable service charge provisions; Additional Services are separately agreed and all fees are subject to VAT against a valid invoice. Insurance and Liability The Property Manager maintains professional indemnity and public liability insurances and indemnifies the Owner for losses arising from any breach, negligence, misconduct or default. Termination and Handover The Owner may terminate on a Termination Event. Upon ending, the Property Manager must transfer accounts, documents and information, assign...

Add the following new clauses 11.4 to 11.8: Subject to clause 11.5, after Completion and notwithstanding this Agreement or the Articles, [ insert names of original investor/s ] (Syndicator) may transfer to any Syndicatee any Investor Shares [ and/or any Loan Notes ]. All other Parties consent and shall, so far as able, use their Company rights (as Shareholder and/or director) to give effect. Syndication proceeds only if: the Syndicator consults in good faith with the Board on the Syndicatee, where practicable (no veto); and the Syndicatee is a [ venture capital OR institutional investor ] [ who is a full member of either the British Private Equity & Venture Capital Association or of the European Private Equity & Venture Capital Association ]. The Company bears reasonable Syndication costs. The Syndicatee confirms it has not relied on any information, advice, appraisal or investigation by/for the Syndicator, will assess matters itself, has no fiduciary...

date [ date ] Parties [ name of Company ], either of [ address ] or incorporated in England and Wales (company registration number [ number ]), with its registered office at [ address ] (Company) [ name of Development Manager ], either of [ address ] or incorporated in England and Wales (company registration number [ number ]), with its registered office at [ address ] (Development Manager) 1 Definitions In this Agreement, the following meanings apply: Additional Development Fee – any extra sum due from the Company to the Development Manager for an Additional Service; Additional Service – any further service that the Company instructs the Development Manager to provide in accordance with clause 10; Anti-Bribery Laws – BA 2010 [ and any other Legislation relating to the prevention of bribery or corruption ] [ (including any similar or equivalent legislation in any other relevant jurisdiction) ]; Appointment – a deed to...

Various statutes govern the exercise of trustee powers. A range of statutes regulates how trustee powers are exercised. For the purposes of this response, it is taken that the trust contains no special or unusual terms or purposes. In those circumstances, the Trustee Act 1925 (TA 1925) and the Trustee Act 2000 (TrA 2000) are likely to be the principal statutory frameworks. As a general rule, there will be no more than four trustees (TA 1925, s 34), and trustees are under a duty to reach decisions that accord with the trust’s purposes and powers. They must act in good faith and eschew conflicts of interest. Decisions should be taken on an informed footing, and the usual position for private trusts (as opposed to, for instance, charitable trusts) is that trustees are required to act unanimously rather than by majority...