Compare codified good faith duties in civil law with the narrower common law position on good faith.
Law & Contract Management
Common Law and Civil Law Approaches to Good Faith, Penalties and Implied Terms
Compare how common law and civil law systems treat good faith, penalty clauses and implied terms, and draft contracts that work correctly under each.
🗓️Duration5 training days
📚Content4 modules · 8 sessions
🎓On completionAccredited attendance certificate
About the programme
Course Overview
A liquidated damages clause that is perfectly enforceable under one legal system can be struck down or rewritten by a judge under another, and a duty of good faith that civil codes state explicitly is one common law courts have historically refused to imply. This course compares how common law and civil law systems treat three recurring drafting problems: good faith, penalty clauses and implied terms. Participants examine codified good faith duties running from pre-contractual negotiation to post-termination conduct, then compare this with the narrower common law position and the relational contract exceptions some courts have recognised. Sessions work through the penalty rule and the legitimate interest test applied to liquidated damages clauses, alongside the civil law practice of judicial moderation that lets a court adjust an agreed penalty. The course also compares how common law implies terms in fact and in law against the suppletive default rules a civil code fills in automatically when a contract is silent. Participants finish by building a jurisdiction comparison table and learning to draft governing law, liquidated damages and good faith clauses that hold up correctly wherever the contract is actually enforced.
Expected Learning Outcomes
Apply the legitimate interest test to assess whether a liquidated damages clause risks being an unenforceable penalty.
Explain how civil law judicial moderation can change an agreed penalty that common law would enforce or strike down.
Distinguish terms implied in fact from terms implied in law under common law contract principles.
Identify suppletive default rules a civil code fills in automatically when a contract is silent.
Assess how a change of governing law affects good faith, penalty and implied term outcomes in a contract.
Draft liquidated damages and good faith clauses that hold up correctly across different legal systems.
Who Should Attend
In-house counsel drafting contracts governed by both common law and civil law jurisdictions.
Private practice lawyers advising clients on cross-border commercial contract negotiations.
Commercial managers negotiating penalty and liquidated damages clauses with overseas counterparties.
Contract managers responsible for agreements governed by unfamiliar foreign governing law.
Legal counsel in regional offices applying group contract templates across different jurisdictions.
Arbitration and dispute resolution practitioners assessing penalty and good faith arguments.
Course Modules
Select any module to see its sessions and points.
01Good Faith Duties Across Legal Systems
2 sessions · 8 points
Session 1Codified Good Faith in Civil Law Contracts
- Explain how civil codes impose a general duty of good faith on the performance and negotiation of contracts.
- Compare the good faith standards codified in civil codes that share the same historical drafting tradition.
- Identify contract stages, from pre-contractual negotiation to post-termination conduct, where good faith applies.
- Assess the remedies a civil law court can grant when a party negotiates or performs a contract in bad faith.
Session 2Good Faith in Common Law: Limited Duty, Relational Exceptions
- Explain why common law traditionally rejects a general duty of good faith in commercial contracts.
- Identify relational contracts, such as long-term joint ventures, where courts have implied a good faith duty.
- Compare statutory good faith duties in sale of goods legislation with their absence in one-off commercial deals.
- Draft an express good faith clause for a common law governed contract and define what conduct it requires.
02Penalty Clauses, Liquidated Damages and Judicial Control
2 sessions · 8 points
Session 1The Common Law Penalty Doctrine and the Legitimate Interest Test
- Explain the penalty rule and why a common law court can strike down a damages clause that is not a genuine estimate.
- Apply the legitimate interest test to assess whether an agreed sum protects a real interest or simply deters breach.
- Distinguish an enforceable liquidated damages clause from an unenforceable penalty using worked clause examples.
- Draft a liquidated damages clause supported by a calculation record showing how the pre-agreed sum was derived.
Session 2Civil Law Judicial Moderation of Agreed Damages
- Explain how civil codes generally enforce agreed penalty clauses while allowing a judge to moderate an excessive sum.
- Compare the grounds on which a civil law court may reduce or increase a contractually agreed penalty.
- Assess how judicial moderation changes the negotiating value of a penalty clause compared with the penalty rule.
- Draft a penalty clause for a civil law governed contract that documents the basis for the agreed sum.
03Implied Terms and Default Rules That Fill Contract Gaps
2 sessions · 8 points
Session 1Implying Terms in Fact and in Law Under Common Law
- Apply the business efficacy and officious bystander tests to decide whether a term should be implied.
- Distinguish terms implied in fact from terms implied in law that attach by default to a contract type.
- Explain how statutory implied terms, such as satisfactory quality, apply unless validly excluded.
- Draft wording that excludes or modifies implied terms where the applicable law permits the parties to do so.
Session 2Suppletive Rules and Gap-Filling in Civil Law Codes
- Identify the default suppletive rules a civil code supplies automatically when a contract is silent on an issue.
- Compare default warranty obligations, such as protection against hidden defects, across civil code traditions.
- Assess when parties can contract out of a suppletive rule and when the rule applies regardless of the wording.
- Review a contract against the applicable civil code to find gaps the code fills in an unintended way.
04Drafting Across Legal Systems With These Differences in Mind
2 sessions · 8 points
Session 1Choosing Governing Law and Displacing Default Rules
- Assess how a choice of governing law clause changes which default rules on good faith and implied terms apply.
- Identify mandatory rules a chosen governing law cannot displace, regardless of the parties' contrary agreement.
- Draft around default rules explicitly instead of assuming a foreign counterparty shares the same legal assumptions.
- Brief negotiating teams on the practical differences a change of governing law makes to familiar clause wording.
Session 2Drafting Liquidated Damages and Good Faith Clauses That Travel
- Draft a liquidated damages clause that would survive scrutiny under the legitimate interest test and judicial moderation.
- Draft a good faith clause with specific, checkable obligations instead of a single undefined general duty.
- Build a jurisdiction comparison table covering good faith, penalties and implied terms for key markets.
- Advise negotiators on which clauses need local law review before a contract is finalised abroad.
What the participant receives
4 course modules
A structured syllabus
8 training sessions
across 5 days
32 detailed points
Applied, detailed content
Accredited attendance certificate
On completing the programme
Complete your registration
We will contact you within one business day to confirm.
Ready to start?
Reserve your seat and start building the skill.