Implied obligation to negotiate in good faith?

Implied obligation to negotiate in good faith?

The court granted an appeal to set aside statutory demands served on the McAllisters by the Society of Lloyds ("Lloyds") on the basis that Lloyds were under an obligation to negotiate a Hardship Agreement with them in good faith, and therefore that the McAllisters had the right to raise a cross-claim for breach of an implied contractual obligation resulting in the loss of the opportunity to enter the Hardship Agreement. - McAllister and anr v's Society of Lloyds (Chancery Division) (judgement delivered 2 December 1998 by Mr Justice Carnwath).

Facts:

The McAllisters were members of Lloyds. They secured an increase in their underwriting capacity with support of Bank Guarantees from Barclays Bank ("the Bank") for £100,000 each, secured on their family home. In 1991 they found themselves in serious financial difficulties and applied to Lloyds for assistance under their hardship scheme. Although an agreement was negotiated the