Jurisdiction(s):
United Kingdom

Key definition

Good faith definition

What does Good faith mean? Good faith describes honest, fair and co‑operative conduct in forming and performing agreements, going beyond simply avoiding deceit. In the UK and Ireland it is a cross‑cutting concept, not a single universal duty. In England and Wales and Northern Ireland, there is generally no overarching implied duty of good faith. The concept operates through express clauses to act in good faith (enforceable if sufficiently certain), implied obligations in some long‑term relational contracts to act honestly and not undermine the bargain, and targeted statutes. Clauses to negotiate in good faith are usually unenforceable for uncertainty, although clear, time‑limited exclusivity/lock‑out agreements can be. Scots...

German commercial contracts: B2B practitioner Q&A on drafting, T&Cs control, liability caps, termination, insolvency, force majeure, limitation, payment terms and interest, dispute resolution, and COVID-19 measures (2022)

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Practice notes

Commercial contracts—Germany—Q&A guide [Archived, 2022 edition]

This Practice Note offers a jurisdiction-specific Q&A overview of commercial contracts in Germany, issued as part of the Lexology Getting the Deal Through series by Law Business Research (published: January 2022). Authors: Lutz Abel Rechtsanwalts PartG mbB—Marius Mann; Benjamin Baisch; Björn Weidehaas

1. Is there an obligation to use Good faith when negotiating a contract?

Yes. Good faith is set out in section 242 of the German Civil Code (BGB) and is a basic tenet of German law. It imposes a duty on both contracting parties to fulfil their obligations faithfully and sincerely, taking customary practice into account. Nevertheless, where there is no breach of specific provisions of the BGB or the German Commercial Code (HGB), enforcing a claim that relies solely on the general clause in section 242 BGB is generally difficult. The principle is fleshed out, for example, in section 138 BGB (no legal transaction contrary to public policy; no usury) and in section 307 et seq BGB (no unreasonable disadvantage to the other party in general terms and conditions)...

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Web page updated on 21/05/2026

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