When Common Law Trumps Equity: The Rise of Good Faith and Reasonableness and the Demise of Unconscionability

Abstract

Equity is that part of law that moderates the harshness of the common law; equity is concerned with fairness, justice, and conscience. Persons aggrieved because of unconscionable transactions have therefore been able to seek assistance from equity in having the transactions set aside. However, it is only in the most abhorrent of situations that equity will do so. It therefore comes as a surprise that courts are prepared to develop the notion of 'good faith' to incorporate the standard of 'reasonableness' that takes this common law concept even beyond the scope of the equitable doctrines. This paper considers the rise of the notion of good faith meaning reasonableness, and how this sits uncomfortably with the existing equitable notion of unconscionability at common law and in legislation.

Keywords: Good Faith, Contract Law, Objective Reasonableness, Unconscionability, Implied Terms

JEL Classification: K12, K40