Frank Fagan, ‘Waiving Good Faith: A Natural Language Processing Approach’

In Northwest, Inc v Ginsberg, the Supreme Court recognized that some states impose contractual good faith performance obligations and others do not. States that impose the duty are said to deploy the doctrine to ensure that contractual partners adhere to community standards of decency, fairness, and reasonableness. By contrast, states that let the parties decide for themselves are said to protect the parties’ reasonable expectations and give full latitude to their contractual intentions. As noted in Ginsberg, these distinct approaches reflect the two leading theories of contractual good faith performance. One theory, the Excluder Thesis, asserts that good faith is an open-ended standard that excludes bad faith. The other, known as the Recapture Thesis, asserts that good faith is more like a closed-ended rule that prohibits parties from recapturing opportunities that are implicitly sacrificed when making promises to a contractual partner …

Fagan, Frank, Waiving Good Faith: A Natural Language Processing Approach (February 27, 2020). New York University Journal of Law and Business, forthcoming.

Leave a Reply