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The Duty of Good Faith in Franchise Agreements in European Civil Law

By Mark Abell

The duty of good faith seeks to deliver a degree of equilibrium to the inherent tension within the franchise relationship between the desire of both parties to obtain the best commercial deal for themselves and a need to have a good ongoing commercial relationship based upon a modicum of mutual trust. It is currently a topic of considerable interest in the United States as a number of states consider enacting legislation imposing a duty of good faith. This is the first in a series of articles that consider how the concept of good faith impacts franchising.

Herein is the first article, which considers how the concept affects franchising in the civil law jurisdictions of the European Union. The second will consider the current U.S. position. The third article will compare and contrast the U.S. and European approaches to good faith, and seek to identify lessons for U.S. legislators to consider if they seek to legislate for a duty of good faith.

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