Interpretation in good faith Sample Clauses

Interpretation in good faith. According to Xxxxxxxx, Xxxxxxxx and Goldman, “The first and most widely accepted principle of interpretation applied to arbitration agreements is the principle of interpretation in good faith.”288 Parallel with the rule of interpretation favoring party intent (if one can be discerned) over the wording of contract289, the principle of good faith gives preference to the parties’ true intent in case it conflicts with the worded intent and presupposes that the contracting parties enter into agreement with the intention that the stipulations of the contract are binding and that both (or all) parties have intended for the subsequent consequences.290 The principle of good faith and fair dealing has also been articulated in the UNIDROIT Principles of International Commercial Contracts as “one of the fundamental ideas underlying the Principles”.291 Xxxxxxxx, Xxxxxxxx and Goldman divide the principle of good faith into three more exact rules of construction of party intent.292 First of all, the examination of party intent must be conducted in context, which refers to taking into consideration the justifiable expectations that the parties envisaged when entering into the agreement. Assumingly the consideration in context also includes reflecting these expectations to the circumstances of the execution of contract. Secondly, the perception of the parties towards the agreement and its objectives may be deduced from their attitude (and actions reflecting the attitude) between the time of the signing and the moment the dispute arises. The use of this “practical and 288 See Xxxxxxxx-Xxxxxx 1999, p. 257. 289 See supra note 260. 290 See Xxxxxxxx-Xxxxxx 1999, p. 257. 291 See UNIDROIT Principles of International Commercial Contracts (2010), Article 1.7, Comment 1. 292 See Xxxxxxxx-Xxxxxx 1999, pp. 257-258. quasi-authentic interpretation” has been common in international arbitration293, e.g. in the Aramco case.294 However, as will be discussed below, the significance of such subsequent conduct may be reduced when juxtaposed alongside the typical offer-reply mechanism and the time of formation of an agreement. Considering this composition, the defining factor is the intent of the parties at the time of contract execution, while the subsequent attitude and conduct is considered to be of lesser (if any) significance, especially if it does not reflect the attitude of both parties.295 Although in KKO 2013:84, the issue concerns a non-signatory – a situation based on the premise tha...