FOOTNOTES FOR A NOTE ON SOME DIFFERENCES IN ENGLISH LAW, NEW YORK LAW, AND SINGAPORE LAW 


¹ Contracts (Applicable Law) Act 1990 c 36, Sch 1) [“Rome Convention”]. 

² Rome Convention, Art 3(1).

³ Rome Convention, Art 7(2).

⁴ Rome Convention, Art 3(3): “The fact that the parties have chosen a foreign law, whether or not accompanied by the choice of a foreign tribunal, shall not, where all the other elements relevant to the situation at the time of the choice are connected with one country only, prejudice the application of rules of the law at the country which cannot be derogated from by contract, hereinafter called ‘mandatory rules’.”

⁵ Rome Convention, Art 5.

⁶ Rome Convention, Art 6.

⁷ Rome Convention, Art 22(1)(a).

⁸ Rome Convention, Art 7(1): “When applying under this Convention the law of a country, effect may be given to the mandatory rules of the law of another country with which the situation has a close connection, if and in so far as, under the law of the latter country, those rules must be applied whatever the law applicable to the contract. In considering whether to give effect to these mandatory rules, regard shall be had to their nature and purpose and to the consequences of their application or non-application.”

⁹ Available at: http://www.europa.eu.int/eur-lex/lex/LexUriServ/site/en/com/2005/com2005_0650en01.pdf.

¹⁰ Restatement (Second) of Conflict of Laws, §187(2): “The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties choice.” 

¹¹ The requirement for a connection is emphasised in the Uniform Commercial Code, §1-105: “Except as provided hereafter in this section, when a transaction bears a reasonable relation to this state and also to another state or nation, the parties may agree that the law either of this state or of such other state shall govern their rights or duties. Failing such agreement, this Act applies to transactions bearing an appropriate relation to this state.”

¹² General Obligations Law 5-1401. It does not apply to contracts for labour or personal services or to transactions involving personal, family, or household services.

¹³ Lehman Brothers Commercial Corp v Minmetals International Non-Ferrous Metals Trading Co 179 F Supp 2d 118 (2000).

¹⁴ Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 277 (PC Nova Scotia).

¹⁵ Peh Teck Quee v Bayerische Landesbank Girozentrale [2000] 1 SLR 148 (CA).

¹⁶ Howard O Hunter, “The Growing Uncertainty about Good Faith in American Contract Law” (2004) 20 JCL 1.

¹⁷ Robert S Summers, “The Conceptualisation of Good Faith in American Contract Law: a general account” in Good Faith in European Contract Law (Reinhard Zimmermann and Simon Whittaker, eds) (Cambridge University Press, 2000), ch 4.

¹⁸ This is the Uniform Commercial Code standard.

¹⁹ Robert S Summers and Jean Braucher, “‘Good Faith’ in General Contract Law and the Sales Provisions of the Uniform Commercial Code” (1968) 54 Va L Rev 195.

²⁰ Steven Burton, “Breach of Contract and the Common Law Duty to Perform in Good Faith” (1980) 94 Harv L Rev 369.

²¹ E Allan Farnsworth, “Good Faith in Contract Performance” in Good Faith and Fault in Contract Law (Jack Beatson and Daniel Friedmann, eds) (Oxford University Press, 1995) 153.

²² A mixed approach is taken in the Restatement (Second) on Contracts, §205.

²³ E. Allan Farnsworth, “Good Faith Performance & Commercial Reasonableness Under the Uniform Commercial Code” (1963) 30 U Chi L Rev 666 at 672.

²⁴ By the middle of the 1980s, all states in the US had recognised a broadly applicable duty of good faith in the performance and enforcement of contracts.

²⁵ Uniform Commercial Code, New York State Consolidated Laws, Cap 38.

²⁶ Carvel Corp v Diversified Management Group Inc 930 F 2d 228 (2nd Cir, 1991) at 230. Modern US case law on good faith originates from a New York Court of Appeals decision in Wood v Lucy, Lady Duff-Gordon 222 NY 88, 118 NE 214 (1917); see Hunter, supra n 15, at 1.

²⁷ Richbell Information Services Inc v Jupiter Partners LP 765 NYS 2d 575 (2003), 309 AD 2d 288 (2003). In this case, it was held that the defendant had exercised its contractual right to veto an IPO in bad faith with the improper motive of depriving the plaintiff’s of their interest in the company.

²⁸ Lord Falconer of Thoroton, Lord Chancellor of the UK, is reported to have said: “The English common law of contract is now a world-wide commodity. It has become so because it is a system that people like. It provides predictability of outcome, legal certainty, and fairness. It is clear and built upon well-founded principles, such as the ability to require exact performance and the absence of any general duty of good faith. These principles were formed in the crucible of experience and are given effect by an expert cadre of judges and lawyers. This has made the common law without rival as the law of choice in commercial transactions.” See http://www.dca.gov.uk/speeches/2005/lc150905.htm.

²⁹ Lord Steyn, “Contract Law: Fulfilling the Reasonable Expectations of Honest Men” (1997) 113 LQR 433 at 439.

³⁰ From the perspective of the conflict of laws, it should also be noted that generally, the choice of a law to govern a transaction refers to the law as it changes from time to time as it applies to the relevant aspects of the transaction.

³¹ C 42.

³² Rome, 4 November 1950.

³³ Ewan McKendrick, Contract Law (Palgrave Macmillan, 6th Ed, 2005) at p 18.

³⁴ Wilson v First County Trust Ltd (No 2) [2004] 1 AC 816, [2003] UKHL 40. In that case, there was found to be no breach.

³⁵ The principle of good faith in Directive 93/13/EEC on Unfair Terms in Consumer Contracts (Art 3)) and the principle of the most favourable interpretation of contractual provisions (id, Art 5). In the UK, this directive is given effect to under the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999, No 2083). Regulation 5 provides: “(1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.” See also Directive 97/7/EC on Distance Selling, implemented in the UK by the Consumer Protection (Distance Selling) Regulations 2000, (SI 2000, No 1334), which imposes a duty on suppliers to provide consumers with adequate information “with due regard … to the principles of good faith in commercial transactions” (reg 7(2)).

³⁶ Directive 86/653/EEC on Self-employed Commercial Agents. This is implemented in the UK through the Commercial Agents (Council Directive) Regulations 1993 (SI 1993, No 3053).

³⁷ See, eg, William Tetley, “Good Faith in Contract Particularly in the Contracts of Arbitration and Chartering” (2004) 35 JMLC 561.

³⁸ Commercial Agents (Council Directive) Regulations 1993, supra n 32, reg 2(1).

³⁹ Id, regs 3(1), 4(1).

⁴⁰ Id, reg 5(1).

⁴¹ Ingmar GB Ltd v Eaton Leonard Technologies Inc Case C-381/98 [2000] ECR-I 09305.

⁴² A copy can be found at: http://frontpage.cbs.dk/law/commission_on_european_contract_law/Skabelon/pecl_engelsk.htm.