The Walford Case Summary

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In the case, Walford v Miles( the “Walford” case), Lord Ackner pointed out that “the concept of a duty to carry on negotiations in good faith is inherently repugnant to the adversarial position of the parties when involved in negotiations”. To analyse whether British courts and Hong Kong courts should follow the Walford position, or to follow the general principle of good faith, I believe we should first understand both principles and their intentions behind.

According to Lord’s Ackner in the Walford case, negotiating with good faith is not possible. Lord Ackner thought good faith was “inherently inconsistent with the positions with the positions of a negotiating party," as every party only pursue for their own interests, and maximise it.
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For common law system, there are Scotland, the United States of America, South Africa and Australia. For civil law system, there are Germany, France and Italy. In Australia, the case United Group Rail Services v Rail Corporation in New South Wales proved the affirmative attitude of the government towards the principle of good faith. In Scotland, Lord Clyde in the case Smith v Governor & Company of the Bank of Scotland agreed the “broad principle in contract law of fair dealing in good faith”, ensuring that both parties have the obligation to protect each other’s interest to make the trade fair. In USA, its UCC requested contracting parties to incorporate the principle of fairness while performing and enforcing contractual agreements. For Italy, Article 1337 of its Civil Code also requests contracting parties to conduct themselves in good faith. In France, its civil code demanded contracting parties to have contracts basing on good …show more content…
Bingham LJ in the Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd case said that good faith should be interpreted as upholding the principle of fair open dealing, supplementing the loophole in British law that there was no law against unfair trading. Although the application of good faith in negotiation might not be suitable as it might hinder both parties from pursuing interests, applying good faith in every step and area of a contract is believed to be fostering a relationship that both parties could trust each other. In contract, the fundamental step is offer and acceptance. During this step, if the principle of good faith is being practised, the offeror would not easily revoke the offer as he would consider the offeree’s benefits. Moreover, under the principle of good faith, withdrawal as a tactic to exchange for improved terms is no longer an option, which protects the party’s right of having a fair

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