Legal Bases for the Principle of Good Faith in International Commercial Contracts

The principle of good faith in contractual dealings has a various degree of acceptability according to legal systems. Although the main differences in the principle of good faith are found between Common Law and Civil Law systems, considerable differences are found even within these respective families of laws of those legal systems. Thus, to avoid difficult problems caused by the difference between Common Law and Civil Law, parties to a contractual dealing often agree to refer to sources of law that do not make reference to a specific national legal system. The CISG does not have a provision regarding good faith due to the tension between Common and Civil Law systems. However, good faith in the CISG functions as a general principle which supplements certain provisions or concepts similar to those of good faith by being the foundation of or by being reflected in them, and the CISG consolidates its status as a uniform regulation. On the other hand, the PICC and the PECL have general provisions on a duty to act in accordance with good faith and fair dealing, and also have a series of articles which incorporate a duty of good faith. By setting forth such articles, the PICC and the PECL both extend the principle of good faith to fair dealing and strengthen the gap-filling role for the CISG.