The obligation to negotiate in good faith is often found in
commercial agreements. Commercial contracts will often include a
Dispute Resolution Clause that provides that if a dispute arises in
connection with the contract, a party must not commence court
proceedings unless that party has participated in mediation in good
faith. As well, there are certain circumstances where there is a
legislative requirement to attend mediation and participate in good
faith.
S 26 of the Civil Procedure Act 2005 (NSW)
("the CPA") provides that Courts in NSW
can make an order that proceedings be referred for mediation,
irrespective of whether the parties consent to an order that they
attend mediation being made. S 27 of the CPA provides that
participants in Court referred mediation are required to
participate in the mediation in good faith. "Good faith"
is not defined in the CPA.
