10. Supplementation of contract and good faith

Question 1

When do we use supplementation of contract?

Answer 1

If there exists no appropriate gap filler in the codes or other statutes

Question 2

Define supplementation of contract

Answer 2

A contract binds the parties not only as to what they have expressly agreed, but also to all that is stipulated by the law or, in case no provision is available, by the usage and by the equity

Question 3

Good faith in civil law

Answer 3

1. Contracts must be negotiated, formed and performed in good faith.
2. This provision is a matter of public policy.

Question 4

Good faith in common law

Answer 4

English

• No general principle of good faith in general law of contract
• Adversarial position of the parties when involved in negotiations and performing their contractual obligations, except for cooperative (commercial) contracts and fiduciaries

American

• Significant role played by the requirement of good faith, especially with regard to the performance of a contract
• The same applies to other common law jurisdictions (as Australia, etc.)

Question 5

Contract drafting in common law

Answer 5

• parties tend to draft their agreement in as much detail as possible, to limit the scope of judicial interpretation
• the content of the bargain shall be set out explicitely as far as possible, in the interests of certainty
• parties shall conduct due diligence exercises and allocate risks as far as possible in the contract itself

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Clauses confirming precontractual statements:

REPRESENTATIONS

Clauses guaranteeing the subject-matter of the contract:

WARRANTIES