It is widely assumed that English contract law does not recognise a general duty of good faith. Instead, the law has preferred an incremental, piecemeal approach of solving particular problems as and when they arise; rather than a general overriding notion of ‘good faith’. For instance, Bingham LJ said in Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd  1 QB 433, “In many civil law systems, and perhaps in most legal systems outside the common law world, the law of obligations recognizes and enforces an overriding principle that in making and carrying out contracts parties should act in good faith. This does not simply mean that they should not deceive each other, a principle which any legal system must recognise; its effect is perhaps most aptly conveyed by such metaphorical colloquialisms as 'playing fair', 'coming clean' or 'putting one's cards face upwards on the table.' It is in essence a principle of fair open dealing… English law has, characteristically, committed itself to no such overriding principle but has developed piecemeal solutions in response to demonstrated problems of unfairness.”
Examples of these piecemeal solutions are not too hard to find. In White & Carter v. McGregors  AC 413, the House of Lords affirmed that it was open for a contracting party to refuse to accept a repudiatory breach and (if possible to do so without the cooperation of the other contracting party) continue with the contract, and bring an action for the agreed price after the time for performance. Lord Reid however held that there was no notion known to English law which compelled a contracting party to act reasonably while making a choice between accepting or refusing a repudiation. Leaving the door slightly open, however, Lord Reid held “"it might be said that, if a party has no interest to insist on a particular remedy, he ought not to be allowed to insist on it…” This door was pushed further open in a couple of cases (The Puerto Buitrago  1 Lloyds Rep 250; The Alaskan Trader  1 All ER 129) but more recently, the position has been summarized in The Aquafaith  2 Lloyd's Rep 61: “The arbitrator was wrong to regard the comments of Kerr J (and all the subsequent references in the authorities to the need for an extreme case of unreasonableness on the part of the owners to bring in the exception) as a "gloss" on Lord Reid's dictum in White & Carter and to treat Lloyd J's dictum as entitling him to focus on "no legitimate interest", without reference to the degree of unreasonableness. When Lord Reid's speech is read in its entirety, it is clear that the innocent party's right to elect is not trammeled by the need to act reasonably. It requires something beyond that before the courts will interfere and prevent the innocent party insisting on performance of the contract. The effect of the authorities is that an innocent party will have no legitimate interest in maintaining the contract if damages are an adequate remedy and his insistence on maintaining the contract can be described as 'wholly unreasonable', 'extremely unreasonable' or, perhaps, in my words, 'perverse'.”
This structure of piece-meal solutions may well change if the approach recently adopted by Leggatt J. in Yam Seng PTE v. International Trade Corporation,  EWHC 111 (QB) gains currency. Leggatt J. drew on several established lines of authority on the various ways in which absolute discretions of contracting parties are read down (including the Socimer line, referred to above). These lines indicated to the Judge that the traditional view – that English law looks at good faith with antipathy – is misplaced. The learned Judge then chose to imply a term into the contract between the parties: the term was implied in fact (and not in law: thus, the term was based on the presumed intent of the parties), but the reasoning behind the implication of the term has great significance. The learned judge started from the proposition in Attorney General of Belize v. Belize Telecom  1 WLR 1988 that implication is part of the broader process of construction of the contract as a whole. He next considered the tests for interpreting a contract: one of which is that the contract must be interpreted as a whole in light of the ‘factual matrix’: Investors Compensation Scheme  1 WLR 896. Leggatt J. then held – and this proposition appears to me to require further consideration – that this factual matrix includes “shared values” of the parties. One of these shared values was (and, indeed, it will be hard to think of a case where counsel would have instructions to argue to the contrary) was ‘honesty’. If one accepts that Belize laid down a broader test for implication than was traditionally understood, and if one accepts that 'shared values' are part of the background of fact in which a contract must be interpreted, this reasoning may well follow. Both those assumptions are debatable.