Good faith is increasingly an express provision in project
contracts, requiring parties to deal with each other in good faith,
and to discuss/negotiate in good faith in certain specific
situations.
Therefore, when you are drafting the contract, be very careful
about defining what contractual difficulties the duty of good faith
applies to; is it general or does it only apply to specific
situations?
Also, be specific where an Employer insists on a power to
terminate for cumulative defaults. What constitutes excessive
defaults or excessive deductions? What protection will the
Contractor have?
It seems that even if the Court decides that a particular
contractual right isn't constrained by a duty to exercise that
right in good faith, the parties will still need to demonstrate
that they are as far as possible acting in good faith.
