4 - Good faith

Summary

Men must be able to assume that those with whom they deal in the general intercourse of society will act in good faith.

Introduction

The principle of good faith has a great deal of normative appeal, and most commentators would acknowledge that it plays a role in all legal systems. The ordinary meaning of ‘good faith’ is ‘honesty of purpose or sincerity of declaration’ or the ‘expectation of such qualities in others’. Good faith is often used interchangeably with bona fides, which is defined as ‘freedom from intent to deceive’. The touchstone of good faith is therefore honesty, a subjective state of mind, but the principle can also incorporate notions of fairness and reasonableness, both of which concern an objective state of affairs. Unfortunately, terms like honesty, fairness and reasonableness are almost as vague as good faith. This leads Rosenne to ask of good faith: ‘Is it a principle and a rule of law, having an identifiable and where necessary enforceable legal content, or is it nothing more than a throw-back to outmoded natural law concepts?’ If good faith has no independent legal content, it may be of little use to WTO Tribunals in resolving disputes: ‘one may acknowledge the power and attraction of a general idea but the idea may be so general that it is of no practical utility to the merchant’.