Cooperation as Philosophical Foundation of Good Faith in International Business-Contracting - A View Through the Prism of Transnational Law

Oxford University Comparative Law Forum (OUCLF), July 2012

59 Pages Posted: 25 Mar 2012 Last revised: 29 Jun 2014

See all articles by Lorena Carvajal Arenas

Lorena Carvajal Arenas

University of Portsmouth

A. F. M. Maniruzzaman

University of Portsmouth - School of Law; Centre for Energy, Petroleum and Mineral Law and Policy, University of Dundee; Faculty of International Law, China University of Political Science and Law

Date Written: July 2, 2012

Abstract

Nowadays traders are very frequently conducting their businesses in accordance with principles and usages forged in the practice of commerce. 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 looks at the role of good faith in that legal system.

As a consequence of the evolution of the law of contracts, 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 article argues 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: it is understood as cooperation between the parties to a contract. This interpretation of good faith requires the party to take various steps to fulfil the legitimate expectations of the other party. Rather than being imposed by a central authority, such a predominantly voluntary cooperation is assumed by the parties 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 proposition will be supported through the analysis of: philosophical doctrines; principles embracing transnational law and international arbitral awards. Furthermore, the development of good faith in some municipal legal systems will be considered; as well as the latest developments of good faith in EU law.

Keywords: Good Faith, Transnational Law, International Business Contract, Cooperative Good Faith

Suggested Citation

Arenas, Lorena Carvajal and Maniruzzaman, A. F. M., Cooperation as Philosophical Foundation of Good Faith in International Business-Contracting - A View Through the Prism of Transnational Law (July 2, 2012). Oxford University Comparative Law Forum (OUCLF), July 2012 . Available at SSRN: https://ssrn.com/abstract=2000932

Lorena Carvajal Arenas

University of Portsmouth ( email )

University House
Winston Churchhill Avenue
Portsmouth, Hampshire PO1 2UP
United Kingdom

A. F. M. Maniruzzaman (Contact Author)

University of Portsmouth - School of Law ( email )

Richmond Building
Portsmouth, Hampshire PO1 3DE
United Kingdom
+44 (0)2392844194 (Phone)

HOME PAGE: http://www.port.ac.uk/departments/academic/law/staff/title,23599,en.html

Centre for Energy, Petroleum and Mineral Law and Policy, University of Dundee ( email )

Nethergate
Dundee, Scotland DD1 4HN
United Kingdom

Faculty of International Law, China University of Political Science and Law ( email )

Beijing
China

HOME PAGE: http://www.cupl.edu.cn:81/sites/en/School_EN_new_Index.jsp

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