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===“[[Good faith]] and [[commercially reasonable manner]]” | ===“[[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]], is one that vexes | 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. | ||
Everyone benefits but officers of Her Majesty's — or (''cough'') the People’s — courts. | |||
As for commercial reasonableness, and that objection I can already see you formulating that it admits shades of doubt, and encourages litigation | “[[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 ad idem|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 {{tag|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? | |||
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> | |||