The meaning of good faith and material breach

The Court of Appeal in Compass Group UK and Ireland Ltd v Mid Essex Hospital Services NHS Trust [2013] EWCA Civ 200, [2013] All ER (D) 200 (Mar) held, allowing an appeal from a decision of Mr Justice Cranston (on which see our June 2012 issue, pp11–12), that the parties’ contract did not impose upon them a general duty of good faith but only a duty to act in good faith in two particular respects. The duty assumed by the parties was to be found in an express term of the contract and it was held that the term required the parties to work together honestly endeavouring to achieve the two objectives. In relation to the material breach provision, it was held that a material breach was one which was substantial and not trivial, but that it need not be repudiatory.