1. COMPARATIVE PRIVATE LAW GOOD FAITH
University of Oslo
Prof. Giuditta Cordero Moss

2. Case I – Withheld information under formation
A food producer sells one of its buildings (formerly a bakery, however not operative for some years) to a small baker.
The seller knows that the buyer intends to start a bakery in that building, and knows that due to a recent change in regulations the building cannot be used for that purpose
None of these circumstances is mentioned during the negotiations or in the contract

3. Withheld information: Breach of precontractual duty to disclose?
English law: no duty to disclose
CISG: (N/A) (?)
Norwegian law: duty to disclose; loyalty
German law: good faith, duty to disclose
Italian law: good faith
UNIDROIT, PECL: good faith (?)

4. Case II – Distributorship affecting calculation of royalty
A licence agreement regulates the calculation of the royalty due to the licensor as a percentage of the price charged by the licencee to the distributor of the products
The licencee establishes a wholly owned company and appoints it as distributor
The price to the distributor is very low, therefore the royalty due to the licensor is very low
The distributor makes a large profit; the licencee benefits of the distributor’s profit

5. Affecting calculation of royalty: breach of duty to act in good faith?
Norwegian law: Duty to act loyally, duty of care
German law: Duty to act loyally, duty of care
Italian law: Duty to act in good faith
Unidroit, PECL: good faith (?)
English law: no duty to act in good faith
CISG: (N/A) no duty to act in good faith

6. Possible aims of rules on good faith
Ensure that relationships are fair beyond formulations in the contract
Ensure exact and precise performance according to the terms of the contract

7. Norwegian law
Avtl. §33: a party is not bound if enforcement would be unfair because of circumstances known to the other partiy at the moment on entering into the contract
Sale of goods act § 19(1)(b): liability in sale ”as is”, if lacking disclosure of material matters that could reasonably be expected and this has induced purchase
General duty of care (hvtjl.), good faith

8. German law
§ 242 BGB: good faith (also precontractual): implied duties to ensure accurate performance, implied limits to avoid abuse of rights
§ 241 BGB: duty of care: protect the other party’s rights or things, disclosure
§ 442 BGB: if fraudulent non-disclosure, buyer does not loose remedies even if acted with gross negligence
Non-disclosure of accident that used car had

9. Italian law Art. 1175 CC: good faith
Art CC: good faith in negotiations
Art. 1375: good faith in performance. Implied duties to ensure accurate performance
Art. 1491CC: buyer looses remedies if negligence. Fraudulent non-disclosure: exemption clause not valid (1490)

10. English law No duty of disclosure
Mere silence is not equal to misrepresentation
Duty to perform contract exactly and precisely according to its terms

11. CISG No general duty of good faith Art. 35:
7. (1): In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade.
Art. 35:
Requirements contained in the contract
Ordinary purpose
Particular purpose expressly or impliedly made known to seller:
Only if reasonable to expect that seller judges
Only if buyer did not know or could not have known

12. UNIDROIT Art. 1.7: Duty to act in good faith
To be determined according to standard in international trade

13. PECL Art. 1:201: Duty to act according to good faith
Art. 1:202: Duty to cooperate
Not to be determined according to national standard

14. Good faith – international standards
Legal doctrine
Arbitral awards (mainly: corroboration)
Principles
CISG
National court decisions
National Legislation
Contractual practice?

15. Common features Misrepresentation
Fraudulent silence = misrepresentation?

16. Parties’ duty to act according to good faith