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International Construction Law Review

GOOD FAITH: AN ANGLO-GERMAN COMPARISON

Dr jur Bastian Fuchs1 and Shy Jackson2

Good faith is often referred to as a key difference between common law and civil law systems. This is understandable, bearing in mind the prominent role good faith has in civil law systems as against the traditional reluctance of English law to recognise good faith as a generally applicable principle.
With globalisation, it is becoming more important to understand such differences. All the more so in international construction projects, where often little thought is given to the choice of governing law and how it may affect the use of a standard construction form such as FIDIC.
While the historical background to good faith in common and civil law systems is a fascinating area for a study,3 the purpose of this article is to consider the practical application of a good faith obligation and how it operates under English and German law. In short, by focusing on the ultimate outcome in decisions made by the German and English courts, it is possible to consider whether a good faith obligation makes a difference, or whether both legal systems reach the same result through different means.
This will be done by looking at selected German and English cases which have considered the application of good faith and then seeking to identify what the outcome would be under the other legal system and would it be different.

GOOD FAITH UNDER GERMAN LAW

Section 242 of the BGB (the German Civil Code) states that an obligor is obliged to perform his contractual obligations in good faith with regard to common practice. This is a short sentence which, however, contains a lot of meaning. It is, with good reason, one of the most important principles in the German civil law. In the event of unreasonable consequences which might occur, section 242 BGB provides for compensation as a last resort. Its intended purpose is to balance the interests of all participating parties.


Pt 4] Good Faith: An Anglo-German comparison

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