Open AccessGOOD FAITH IN FRANCHISE CONTRACT
Author(s) -
Nurli Yaacob,
Nasri Naiimi
Publication year - 2020
Publication title -
international journal of law, government and communication
Language(s) - English
Resource type - Journals
ISSN - 0128-1763
DOI - 10.35631/ijlgc.519009
Subject(s) - fair dealing , good faith , freedom of contract , law , discretion , law and economics , faith , element (criminal law) , jurisdiction , context (archaeology) , business , economic justice , political science , sociology , epistemology , philosophy , paleontology , biology
Good faith has been defined as justice, fairness, reasonableness, decency, taking no chances, and so on. The concept of good faith has long been rooted in contract law under the jurisdiction of Civil law, although the definition of it is still debated until today. However, the view of the Common Law tradition does not recognize the concept of good faith as long as the contract is entered into with the freedom of contract and both parties abide by the terms of the contract. Given that a franchise contract involves a long-term contract and always been developed, it is impossible to define both rights and responsibilities base on express terms only. As such, the franchise contract gives the franchisor the right to exercise its discretion in executing the contract. It is in this context that the element of good faith is very important to ensure that the franchisor does not take advantage of the franchisee and that the business continues to prosper. Therefore, the objective of this article is to discuss the concept of good faith in a franchise contract. The findings show that the common law system that initially rejected the application of the concept of good faith also changed its approach and began to recognize the concept of good faith as it is very important for relational contracts such as franchise contracts.