(a) Parties to international business transactions must act in accordance with good faith and fair dealing in international trade. This standard applies to the negotiation, formation, performance and interpretation of international contracts.
(b) The standards and requirements imposed on the parties by this Principle vary depending on the individual circumstances involved, such as the trade sector in which the parties are operating, their size and degree of professional sophistication, and the nature and duration of the contract.
(c) The parties may not exclude or limit the application of this Principle to their legal relationship.
Please cite as: "Commentary to Trans-Lex Principle No. I.1.1 - Good faith and fair dealing in international trade, http://www.trans-lex.org/901000"
1 Subsection (a) clarifies that the scope of the principle of good faith is not limited to the interpretation of contracts but provides a behavioural standard for the parties from the beginning to the end of their (pre-)contractual relationship. This means that each party has the obligation to display a behaviour towards the other party which cannot harm the latter and which takes into account the reasonable expectations of the other side. The parties to a contract have to display a normal and usual diligence which is reasonable for the safeguard of their interests, particularly in trying not to make rushed offers, with a potential to surprise the other party.
2 The Principle of good faith is of such pivotal significance not only for transnational contract law but for legal relationships as a whole that the parties may not contractually exclude or limit its application. Subsection (c) makes it clear that the Principle of good faith is not subject to the Principle of freedom of contract. Such an agreement would itself be void because it is against boni mores.
3 Subsection (b) makes it clear that the application of the good faith principle is never a purely mechanical process, but always requires a determination of what is deemed to be a proper conduct of a party, taking into account all circumstances of the concrete case. This analysis must include the nature of the contract itself. Thus, the reference to the ‘duration of the contract’ in subsection (b) is meant to indicate that the time factor may play an important role as an ‘amplifier’ for the parties’ duties imposed on them by the good faith principle. Thus, in long-term, ‘relational’ contracts, the principle of good faith will almost always impose increased duties of good faith on both parties as compared to ‘one off’ exchange contracts. These increased duties may concern, e.g., the parties' duty to notify the other side in case of problems in the performance of the contract and the parties' duty to cooperate with the other party when such cooperation can reasonably be expected for the performance of that party's obligations. The reference to the degree of the parties' professional sophistication in subsection (b) must be seen and applied in conjunction with Trans-Lex Principle I.2.3.
Investment Policy – The Committee shall be obliged only to use good faith and to exercise its honest judgment as to what investments are from time to time in the best interests of the Trust Fund and the Participants and their Beneficiaries. Furthermore, the Committee may instruct the Trustee to hold any portion of the Trust Fund in cash and uninvested whenever it deems such holding necessary or advisable – Sample Contracts – OneCle – 401(k) Plan – Dell Inc 2007 – 13.7
Sales & Purchase Contract
Anti-fraud – If any party is found violating the principle of good faith and defrauding the other party by providing false registration materials, qualification certificate and information or covering up the truth, the defaulting party shall bear a penalty no more than USD{X}. This term does not affect the validity that the defaulting party shall take liabilities for breach of contract as stipulated in other provisions – Sample Contracts – OneCle – Sales Contract between J.J. Solar Co. and Win-Korea Trading PTY., LTD – N° JINKO0812130001-WZW – 2008 – (XII.)
Preservation of records – The Parties shall preserve and keep all books and records that they own immediately after the Closing relating to the Purchased Assets (...) unless disposed of in good faith pursuant to a document retention policy (...) – Standard Contracts – OneCle – Master Sale and Purchase Agreement – General Motors Corporation and Vehicle Acquisition Holdings – 2009 – Section 6.23
page 4. I do not think that the absence of good faith is something positive which you would put in an ad... Anyway even if you say that there is no general principle of good faith in England there is however always the same result. That is because in england are many "special" principles like "clean hands" which would be considered as "good faith" in other jurisdictions.
Prof. Dr. Klaus Peter Berger
RE: Also in the UK?
The famous brochure by the English Law Society has caused some reactions here in Germany, among others a similar brochure by the leading German legal associations ("www.LawmadeinGermany.de"). I think that today, the general principle of good faith has found its way into English law through the EU-Directives, like the one on unfair terms in standard forms, which contain a general principle of good faith. Also, the result is the same in civil law and English common law because the latter works with implied contractual terms.
Biblio 
Materials 
Links 
Discussions 
CENTRAL-List of Lex Mercatoria - Principles, No. IV.6.8 - (Re-) Negotiation Agreement / Clause (Pactum de negotiando)
Please cite as: "Commentary to Trans-Lex Principle No. I.1.1 - Good faith and fair dealing in international trade, http://www.trans-lex.org/901000"
1 Subsection (a) clarifies that the scope of the principle of good faith is not limited to the interpretation of contracts but provides a behavioural standard for the parties from the beginning to the end of their (pre-)contractual relationship. This means that each party has the obligation to display a behaviour towards the other party which cannot harm the latter and which takes into account the reasonable expectations of the other side. The parties to a contract have to display a normal and usual diligence which is reasonable for the safeguard of their interests, particularly in trying not to make rushed offers, with a potential to surprise the other party.
2 The Principle of good faith is of such pivotal significance not only for transnational contract law but for legal relationships as a whole that the parties may not contractually exclude or limit its application. Subsection (c) makes it clear that the Principle of good faith is not subject to the Principle of freedom of contract. Such an agreement would itself be void because it is against boni mores.
3 Subsection (b) makes it clear that the application of the good faith principle is never a purely mechanical process, but always requires a determination of what is deemed to be a proper conduct of a party, taking into account all circumstances of the concrete case. This analysis must include the nature of the contract itself. Thus, the reference to the ‘duration of the contract’ in subsection (b) is meant to indicate that the time factor may play an important role as an ‘amplifier’ for the parties’ duties imposed on them by the good faith principle. Thus, in long-term, ‘relational’ contracts, the principle of good faith will almost always impose increased duties of good faith on both parties as compared to ‘one off’ exchange contracts. These increased duties may concern, e.g., the parties' duty to notify the other side in case of problems in the performance of the contract and the parties' duty to cooperate with the other party when such cooperation can reasonably be expected for the performance of that party's obligations. The reference to the degree of the parties' professional sophistication in subsection (b) must be seen and applied in conjunction with Trans-Lex Principle I.2.3.
4 Also, the fundamental principle of good faith is the source of many other general but more specific principles and rules of transnational commercial law, such as the principle of sanctity of contracts ("pacta sunt servanda") as the basis of transnational contract law, the prohibition of inconsistent behaviour, the duty to renegotiate, the duty to notify and cooperate with the other side, the right to set off, the common intentions of the parties as the goal of every contract interpretation, or the existence of implied contractual obligations. Good faith may also set limits to the exercise of the parties' legal rights, e.g. with respect to the prohibition of abuse of rights or the parties' right to withhold performance. Before resorting to the overriding general principle of good faith, one should always seek to apply these more specific and concrete principles and rules.