GOOD FAITH AS LEGAL NORM

Good faith in Contract Law has the form of a general clause. Its application presupposes a delegation to the judge of a power to determine in particular cases the specific content of the legal duties or the legal effects implied in a contract. In order to carry this task forward, the judge must assess all the circumstances specific to the case in light of the values and purposes to which good faith points at. Its application, therefore, presupposes the exercise of a delegated but strictly directed power, aimed at specifying the meaning of the good faith standard. The need for such a standard stems from the lack of exhaustivity of the norms of Contract Law. Thus, good faith allows alleviating the unsatisfactory results brought forth by a formalistic application of the Law of Contract and also giving due consideration to the changes in economic and social circumstances which were unforeseeable to the legislator. In this sense, good faith fosters a coherent application and a development of Contract Law that is consistent with its foundational goals and values.