'Good Faith Revisited' - with Ronen Perry (University of Haifa)
Abstract: We analyze the doctrine of good faith performance as implemented in the United States. We first show that all major accounts of good faith performance in case law and academic literature rely on the concept of community standards. We then use a social choice theoretic model to show that community standards are deeply impractical. The model operates in the following way. First, there is a set of individuals, each of whom has a perception of which behaviors are in good faith. These may be either perceptions of actual practice or perceptions of morality. The many perceptions of the individuals are then aggregated to form the common perception which is used to adjudicate cases of good faith performance. We introduce a set of axioms and show that they are not satisfied by any practical method.
Faculty of Economics and Business
Roetersstraat 11, 1018 WB Amsterdam