Commercial transactions: The challenge from equity

Extract: I now return to the dual focus of this paper on liability and remedy. In the context of liability, I shall consider the increasing use by the courts of general standards, encompassed within broad ’equitable’ concepts, as determinants of liability. Such concepts are, very loosely speaking, ’equitable’, not in the sense of necessarily having their origins in the Courts of Chancery, but in the sense of being concerned with providing flexible legal tools capable of giving effect to principles of justice and fairness in a wide variety of contexts (albeit by resort to familiar legal techniques and by analogy with established categories of case). In particular, I propose to consider two concepts gaining increasing currency in our law, namely ’unconscionable conduct’ and an implied duty of ’good faith and fair dealing’ in (the performance of) contracts. Although these two concepts may have differing core areas of operation, with the former focusing on conduct engaged in at the time of entry into contracts, and the latter focusing on the performance and termination of contracts, there will be considerable areas of overlap and convergence in the operation of these concepts, as will be seen below.