Template:Good faith capsule: Difference between revisions
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| (2 intermediate revisions by the same user not shown) | |||
| Line 1: | Line 1: | ||
=== | ===“[[Good faith]] and [[commercially reasonable manner]]” as a general standard=== | ||
Whether a merchant should commit himself to dealing in [[good faith]], or in a [[commercially reasonable manner]], or [[In good faith and a commercially reasonable manner|both]], is one that vexes many of our learned friends. Especially those in [[US Attorney|America]]. The only discomfort it should occasion is to a solicitor’s<ref>Being an officer of the court, American friends, and not someone who goes door-to-door selling encyclopaedias.</ref> livelihood, for this magic expression, while doing no more than articulating the [[commercial imperative]] and the basic commercial outlook of a [[good egg]], puts many a tedious [[negotiation]] to the sword. | Whether a merchant should commit himself to dealing in [[good faith]], or in a [[commercially reasonable manner]], or [[In good faith and a commercially reasonable manner|both]], is one that vexes many of our learned friends. Especially those in [[US Attorney|America]]. The only discomfort it should occasion is to a solicitor’s<ref>Being an officer of the court, American friends, and not someone who goes door-to-door selling encyclopaedias.</ref> livelihood, for this magic expression, while doing no more than articulating the [[commercial imperative]] and the basic commercial outlook of a [[good egg]], puts many a tedious [[negotiation]] to the sword. | ||
| Line 14: | Line 14: | ||
'''Litigation risk''': The one argument against the general principle is that it is inherently vague and therefore a source of potential dispute ''in itself'', ''even if'' we always exercise our rights reasonably and in good faith. But come now — it only presents [[litigation]] risk to clients who don’t trust you — and here you have bigger problems, frankly — or for those whom ''you'' don’t trust — also not without issues. Here, your problem is not the good faith obligation; it’s that you have a lousy client relationship. It hardly affects litigation risk in any case: An unhappy client will take action either way, and will argue a lack of good faith in any case. | '''Litigation risk''': The one argument against the general principle is that it is inherently vague and therefore a source of potential dispute ''in itself'', ''even if'' we always exercise our rights reasonably and in good faith. But come now — it only presents [[litigation]] risk to clients who don’t trust you — and here you have bigger problems, frankly — or for those whom ''you'' don’t trust — also not without issues. Here, your problem is not the good faith obligation; it’s that you have a lousy client relationship. It hardly affects litigation risk in any case: An unhappy client will take action either way, and will argue a lack of good faith in any case. | ||
A | A [[contract]] is a bond of [[trust]]. How would a merchant explain to his counterparty that he wished to reserve for himself the right to act in ''[[bad faith]]''? | ||
As for [[commercial reasonableness]], and that objection I can already see you formulating that ''it admits shades of doubt, and encourages litigation'' — well, for you the great case of {{casenote|Barclays|Unicredit}} should be a source of succour. And for you Americans, for whom {{casenote|Barclays|Unicredit}} is of persuasive value only, there is the fact that “[[in good faith and a commercially reasonable manner]]” is written into the [[Uniform Commercial Code]] should bend your ear: if it is okay there — and in the {{nyvmcsa}} — why not elsewhere? | As for [[commercial reasonableness]], and that objection I can already see you formulating that ''it admits shades of doubt, and encourages litigation'' — well, for you the great case of {{casenote|Barclays|Unicredit}} should be a source of succour. And for you Americans, for whom {{casenote|Barclays|Unicredit}} is of persuasive value only, there is the fact that “[[in good faith and a commercially reasonable manner]]” is written into the [[Uniform Commercial Code]] should bend your ear: if it is okay there — and in the {{nyvmcsa}} — why not elsewhere? | ||
In any case, whatever your contract says, if a court finds you have acted wantonly, or in bad faith, do not expect much sympathy when you argue that, by the contract, you were ''entitled'' to. <br> | In any case, whatever your contract says, if a court finds you have acted wantonly, or in bad faith, do not expect much sympathy when you argue that, by the contract, you were ''entitled'' to. <br> | ||
Latest revision as of 13:30, 14 August 2024
“Good faith and commercially reasonable manner” as a general standard
Whether a merchant should commit himself to dealing in good faith, or in a commercially reasonable manner, or both, is one that vexes many of our learned friends. Especially those in America. The only discomfort it should occasion is to a solicitor’s[1] livelihood, for this magic expression, while doing no more than articulating the commercial imperative and the basic commercial outlook of a good egg, puts many a tedious negotiation to the sword.
Everyone benefits but officers of Her Majesty's — or (cough) the People’s — courts.
“In good faith and a commercially reasonable manner” cuts the crap and promises to unlock some negotiations and take the tedious line-by-line muck-raking out of others.
There is a certain kind of legal negotiator apt to see phantoms and ghosts at every turn. He has a bleak vision indeed of a counterparty’s general commercial aspirations for his organisation.
“What if,” he will say, “your traders mendaciously use this clause to bring about my firm’s misfortune in a way I – er – cannot now anticipate?” (This fellow’s imagination tend to be fantastical in the abstract, but rather prosaic in the particular).
Such a chap is often placated by the magical expression “acting in good faith and a commercially reasonable manner”. It may help persuade him across that wobbly bridge to consensus. Many a time it has helped the JC get home in time for supper.
Litigation risk: The one argument against the general principle is that it is inherently vague and therefore a source of potential dispute in itself, even if we always exercise our rights reasonably and in good faith. But come now — it only presents litigation risk to clients who don’t trust you — and here you have bigger problems, frankly — or for those whom you don’t trust — also not without issues. Here, your problem is not the good faith obligation; it’s that you have a lousy client relationship. It hardly affects litigation risk in any case: An unhappy client will take action either way, and will argue a lack of good faith in any case.
A contract is a bond of trust. How would a merchant explain to his counterparty that he wished to reserve for himself the right to act in bad faith?
As for commercial reasonableness, and that objection I can already see you formulating that it admits shades of doubt, and encourages litigation — well, for you the great case of Barclays v Unicredit should be a source of succour. And for you Americans, for whom Barclays v Unicredit is of persuasive value only, there is the fact that “in good faith and a commercially reasonable manner” is written into the Uniform Commercial Code should bend your ear: if it is okay there — and in the 2016 NY Law VM CSA — why not elsewhere?
In any case, whatever your contract says, if a court finds you have acted wantonly, or in bad faith, do not expect much sympathy when you argue that, by the contract, you were entitled to.
- ↑ Being an officer of the court, American friends, and not someone who goes door-to-door selling encyclopaedias.