Relational contracts and good faith

In Svella Connect Ltd v Virgin Media Ltd [2026] EWHC 2223 (TCC) Pepperall J held that the claimant had no real prospect of succeeding in its claim that the defendant was in breach of an implied duty of good faith said to be found in contracts concluded between the parties. In so concluding, Pepperall J declined to accept that the contracts between the parties could be classified as "relational" contracts and, importantly, held that proof that a contract is a relational contract does not inevitably lead to the implication of a good faith term as a matter of law. The case acts as a helpful reminder that the test for the implication of a term is that the term must be necessary in order to make the contract work and that such a threshold is a difficult one for contracting parties to overcome particularly where, as here, the parties have entered into a reasonably detailed contract presumably with the benefit of legal advice.