Study Of The Common Law Principle Of Good Faith

This article is about the obligations of good faith, esp. good faith purchase. Referring to the sections of good faith in U.C.C., the article analyzes the theoretical and practical questions of good faith in commercial fields. It introduces the varied recognition and understanding of good faith in American academic circles and gives a review of authoritative works of different periods in the American law history. It is consisted of nine chapters as follows:Chapter 1 is about the meaning and extension of good faith in Uniform Commercial Code. Good faith is defined in U.C.C. as "honesty in the conduct or transaction concerned". It has at least three different meanings: (1) Honesty in fact; (2) Observance of reasonable commercial standards in the case of a merchant; (3) Due care or diligence to overcome an obstacle. The requirement of good faith is different to different parties. Generally, the code puts more duty on merchants than non-merchants. In addition, it has a tendency of using objective standards of good faith instead of subjective standards in the judicial practices.Chapter 2 is "the recognition and conceptualization of good faith". The conceptualization of good faith, as an excluder in Uniform Commercial Code satisfies the relevant criteria of adequacy. It serves: (1) faithfulness to an agreed common purpose and consistency with the justified expectations of the other party, and (2) community standards of decency, fairness or reasonableness of our society. Good faith does not have a general positive meaning, but it is conceptualized as an "excluder" which rules out a wide range of bad faith. Besides, It is also impossible to enumerate a complete catalogues of bad faith. Although, there will be a risk of overextension of good faith in the name of moral idealism, the gain that good faith bring to us is worth this risk.The third chapter is about good faith and the enforcement of standardized terms. Standardized contracts constitute two commercial phenomena (1) "abstract generality" and (2) "unilateralness", so the use of standardized forms threatens two distinct abuses "surprise" and "imbalance" which bring damages to modern commerce. To protect the reasonable expectation of the non-drafting party and enforcement of standardized forms, this article proposes four tests for good faith. (1) Did the non-drafting party entertain a specific interest or...