THE ROLE OF THE DOCTRINE OF GOOD FAITH IN PAKISTANI CONTRACT LAW

Abstract

This study has a critical look at the doctrine of good faith in respect to Pakistani contract law, looking at the fact that it is not provided in the statutory law and the fact that in most judicial decisions, it is not used in a consistent manner. Despite the fact that the Contract Act, 1872 of Pakistan, based on the English common law tradition, does not list a general obligation of good faith, similar principles have not been sporadically referred to by equitable principles and in terms of public policy. The paper relates the historical evolution of good faith during the civil law, common law, and the Islamic State of jurisprudence, and it reveals the conceptual flexibility and pre-eminence of good faith relative to the healthiness of the contractual relationship through frankness, equity, and how to behave with each other.

The paper also uses comparative legal analysis to discuss the development of the doctrine in the United Kingdom, India, Malaysia, and the Islamic law, which has attractively provided the journeys of how these jurisdictions have been able to balance the traditional legal principles with the ethical obligations of fair dealing. It goes on to state that lack of an express good faith requirement in Pakistan, produces legal uncertainty, increases the cost of transactions, undercuts alternative dispute resolution and discourages domestic and foreign investment. In this respect, the absence of a codified standard also leads to the discrepancy between the Islamic ethical doctrine that exalts the concepts of trust (amanah), equitableness (adl), and good intention (niyyah) and the rationalist, formalistic strategy of Pakistani contract enforcement.

In the research, the role of gradual introduction of good faith in the Pakistani contract law is argued with the help of judicial interpretation, legislation change, and the introduction of a good faith depending on the industry. Based on the comparative models and the Islamic mandate of the constitution of Pakistan, the paper suggests some of the measures that can be used to bring harmony to the doctrinal coherence and commercial feasibility and religious principles. These are supplementing the Contract Act with a good faith clause, giving to an inference of duties of fair dealing in the relational contract, and reforming the law in harmony with the moral foundations of Islamic commercial law.

This paper will finally conclude that acceptance and enhancement of the doctrine of good faith will be critical to establishing a more responsible, fair and competitive legal mechanism in Pakistan. It arrives at a conclusion that this kind of reform will not just improve the state of commercial certainty but also requires that Pakistan lives up to its constitutional and moral obligation to be just towards its contractual partners.