Perm University Herald. Juridical Sciences. 2020. Issue 3 (49)

N. V. Zaytseva, Russian Presidential Academy of National Economy and Public Administration

DOI: 10.37200/IJPR/V24I8/PR280170

Introduction: this article looks into the matter of how the principle of good faith, as applied in different legal systems, impacts the legal bonds between commercial entities, depending on whether such bonds actually exist or not, and in the context of classification of key contractual terms.  Being essentially abstract, the principle of good faith can be interpreted in different ways from a legal perspective and, therefore, may entail different legal consequences, which, on the one hand, can close the legal and contractual gaps but, on the other hand, can give rise to legal uncertainty and destabilization of the civil turnover. Purpose: to identify the general legal elements of good faith and the ways the requirements of the generally binding character of good faith are applied at different stages of the contractual process; to define the conditions for the contractual performance to change under the influence of good faith. Methods: dialectical methods of research, deduction and induction techniques, empirical methods of comparison, description and interpretation as general scientific methods; there were also used specific scientific methods such as historical, legal comparison, and systems analysis. Results: analysis of the applicable legislation, court practice and scientific research shows that good faith is currently opposed to the formal concept, and this has become the cause of different approaches to assigning the generally binding character to good faith in the continental law and common law systems.  The generally binding character of good faith is presumed in countries with the continental system of law because the judiciary often lacks any other possibility to take into account the actual will of the parties, whereas the common law countries operate a wide range of legal mechanisms for revealing the intentions of the parties, and, therefore, the generally binding character of good faith may jeopardize legal certainty and stability of legal bonds. Conclusions: the principle of good faith, whilst having many-faceted functions and tasks, is mainly aimed at taking into account the subjective component of legal relations in order to exclude the parties’ conduct intended to discriminate the legal position of the other party. Essentially, this objective consolidates all the legal principles because, notwithstanding the differences in legal substance, application of such principles by courts eventually brings about the same outcome. However, the forms of the discriminatory conduct prohibition do not produce the same impact on the legal bond development, and this can make commercial turnover unpredictable.  In practice, when choosing an applicable legal principle, the judiciary would do better to opt for a model that would preserve the legal bond and would allow for achieving the contractual purpose, while excluding bad/unfair conduct of any one party.