Nowadays traders are governing their businesses by principles and practices embraced in standard contract forms and regulations of self-governing associations of merchants. This has given rise to an ongoing discussion on the existence of an autonomous third legal order called transnational commercial law or the lex mercatoria. This article assumes the existence of this phenomenon in order to find out the current state of one particular principle regulating international trade: good faith. As a consequence of the rise of transnational law and of the influence of its prevalent actors – multinational corporations – a cooperative view of contracts has been developed in international trade. This cooperative view is observable, for example, in partnership agreements, supply chain management and strategic alliances. It is postulated in this article that the rationale of cooperation, as the underlying current of transnational commercial contracts, has prompted a new way of interpreting the principle of good faith therein: it is understood as cooperation between the parties to a contract. This interpretation of good faith requires the party to take steps to fulfill the legitimate expectations of the other party. Interestingly, this is a kind of ‘voluntary cooperation’, assumed by the parties – not imposed by a central authority – for the common good of everyone involved in the contractual relationship. This notion fits the experience of global trade today to the point that – it will be submitted – good faith is the fulcrum of cooperation in cross-border trade. This theory will be verified mainly through the analysis of: philosophical doctrines; sets of principles embracing transnational law and; international arbitral awards. Furthermore, the developments of good faith in some municipal legal systems are also offered here; e.g., the case of English and Dutch law. Finally, the study contained in these pages reveals an important aspect of the current state of international commerce today, since good faith is – as it was in the Middle Ages – its essential principle.
|Journal||Oxford University Comparative Law Forum|
|Publication status||Published - May 2012|