Law missing good faith

dodgy-businessmanA shonky businessman who enters into a contract at his partner’s expense is probably not acting in good faith, yet Jessica Viven, lecturer in Flinders Law School, says Australia is one of the few countries in the world without a law to tackle such disputes of fairness and honesty under the concept of good faith.

Unlike civil law countries, Ms Viven says a clear and uniform definition of the concept of good faith is non-existent in Australian legislation, leaving courts to come up with their own rules and interpretations when these cases arise.

Accordingly, Ms Viven has just begun a three-year PhD to determine whether Australia should officially adopt the principle of good faith in contract law, drawing on evidence from systems that have recognised the concept, including European civil law countries, to mount her case for the formal recognition of the good faith principle.

“In countries such as France and Germany the idea of good faith means you enter into a contractual relationship with good intentions, you don’t try to take advantage of either the other party’s situation or your own situation,” Ms Viven said.

“But in Australia there is no statute, act or case that says what good faith is even though it’s used a lot across law disciplines, so why would Australia not recognise the principle and give it a clear definition when it’s already using it?

“Law is supposed to be certain, so if you have a dispute with someone you should be able to refer to the rule, yet in Australia you can’t because the good faith rule isn’t there.”

As part of her project, Ms Viven hopes to use Flinders University’s new cotutelle program to undertake a portion of her research at home and a portion at France’s Université Toulouse 1, leading to a double-badged degree awarded by both institutions.

Based on preliminary research, she said her hypothesis was that Australia should indeed develop a new act of Parliament, or amend existing acts, to officially define and recognise good faith so it can be applied not only to contract law but also to other law disciplines “to promote legal certainty”.

“The problem is that in Australia good faith doesn’t exist but the bad behaviour does, so Australia has come up with all these different ways of dealing with bad behaviour,” Ms Viven said.

Jessica Viven
Jessica Viven

“If, for example, you take advantage of a party who doesn’t speak English and there isn’t a good faith principle the judges and the courts will come up with a way to stop the bad behaviour from reoccurring but there’s not one central principle for them to draw on,” she said.

“But I think we would be far better off with one principle rather than different piecemeal solutions.”

Ms Viven is one of two Flinders students to receive the University’s 2012 Joyner Scholarships in Law, Medicine and Science – a three-year prize encouraging original or progressive postgraduate research that leads to advancements in any aspect of law, medicine or science.s

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