Developing Good Faith: Equality, Autonomy and Fidelity to the Bargain

This article explores the future of good faith in South African contract law after the Constitutional Court decision in Beadica 231 CC and Others v Trustees for the time being of the Oregon Trust and Others [2020] ZACC 13, 2020 (5) SA 247 (CC), taking Froneman J’s proposal for a distinct role complementing public policy as its starting point. It investigates the majority judgment’s denial of a ‘free-standing’ status to all ‘abstract values’, concluding that this should not be treated as confining good faith to an exclusively ‘backstage’ role. Good faith has long had an established ‘frontline’ presence in several contexts, which Beadica either acknowledged or failed to renounce. This includes the implied duty of good faith in employment contracts, which was delineated in the unanimous judgment authored by Froneman J in National Union of Metalworkers of South Africa obo Khanyile Nganezi and Others v Dunlop Mixing and Technical Services (Pty) Limited and Others [2019] ZACC 25, 2019 (5) SA 354 (CC). I argue that this judgment regarded good faith as requiring not altruism but reciprocal respect for the equality of persons. This conception of good faith is shown to be present in firmly established uses of good faith, both ‘backstage’ and ‘frontline’, and also to provide essential support for the enforcement of contractual obligations when, as the Court is wont to do, this is justified by appealing to autonomy. Common law jurisdictions where good faith has recently risen to prominence against an historical and institutional backdrop similar to South Africa’s (e.g. Australia, Canada and England), also exhibit this conception of good faith. The article accordingly investigates recent good faith jurisprudence in these jurisdictions with a view to considering what might be learnt from this for developing the future ‘frontline’ role of good faith in South Africa. Here it draws attention to the association of good faith with ‘fidelity to the bargain’ and to how that results in a careful and transparent exercise of bounded judicial discretion in light of commercial expectations. This refutes claims that the ‘frontline’ use of good faith threatens the principle of legality and commercial certainty.