The principle of good faith constitutes a fundamental rule of private law and, in particular, of commercial law, where speed, trust, and flexibility of transactions are decisive factors. It is a principle with a dual function: both interpretative and regulatory, guiding the behavior of contracting parties in accordance with honesty and the integrity required by business life.
In Greek law, the principle of good faith is enshrined in Article 288 of the Civil Code, which provides that “the debtor is obliged to fulfill the performance in accordance with the dictates of good faith as established in commercial practice.” At the same time, Article 200 CC stipulates that contracts shall be interpreted in accordance with good faith and customary commercial practices. These provisions reflect the broader principles of fairness and protection of legitimate expectations, which permeate the entire law of transactions.
Good faith primarily operates as a criterion for interpreting declarations of intent and the terms of a contract. When provisions are ambiguous or incomplete, interpretation must align with the spirit of honesty and the justified expectations of the counterparty. Furthermore, it serves as a regulatory mechanism, imposing obligations not expressly stated in the contract but deemed self-evident based on commercial ethics, such as duties of information, cooperation, and avoidance of abusive conduct.
Indicatively, Greek courts have elevated good faith to a tool for supplementing contractual gaps. In Greek jurisprudence (e.g., Supreme Court Decisions 1227/2017, 295/2019), it has been held that the duty of good faith includes pre-contractual and post-contractual obligations, such as maintaining confidentiality or refraining from actions that frustrate the purpose of the contract.
In commercial transactions, good faith acquires particular importance due to the professional nature of the relationships and the need for stability and predictability in the market. Business professionals assume obligations with a higher degree of responsibility and must act with honesty, diligence, and respect for the interests of their counterparts.
The concept of “commercial good faith” (lex mercatoria) has historically functioned as the informal law of merchants, comprising rules developed through trade practice. Today, this principle re-emerges through the unification of commercial law, such as in the UNIDROIT Principles and the Vienna Convention on Contracts for the International Sale of Goods (CISG), both of which expressly provide that parties must act “in good faith and in accordance with fair dealing.”
At the European level, the Court of Justice of the European Union (CJEU) has incorporated good faith as a general principle of EU law, influencing the domestic law of Member States. For instance, Directive 93/13/EEC on unfair terms in consumer contracts explicitly relies on the notion of good faith, rendering clauses invalid when they disturb the balance of mutual rights and obligations.
The principle of contractual freedom is a cornerstone of private autonomy. However, good faith acts as an essential counterbalance, preventing the abusive or immoral exercise of rights. Through Article 281 CC, good faith also operates in the field of prohibiting the abusive exercise of rights, serving as a safeguard against behavior that, although formally lawful, contradicts fairness and social justice.
Greek case law has made extensive use of this principle to address abusive practices in commercial relationships, such as unilateral interest rate increases, unfair terms in franchise or agency agreements, and oppressive exclusivity clauses.
The emergence of electronic transactions and smart contracts introduces new challenges for the application of good faith. In automated transactions, where terms are executed algorithmically through software, the question arises as to whether and how human judgment and the fairness inherent in good faith can be incorporated into a “code” that leaves no room for interpretation.
Modern legal theory argues that good faith must function as a corrective mechanism against the rigidity of algorithmic transactions, ensuring fair risk distribution and the protection of legitimate expectations—even when the “program” their contractual relationship.
Although of ancient origin, the principle of good faith remains more relevant than ever. It serves as a dynamic tool for adapting the law to the needs of an evolving economy, where speed and technology should not erase the ethical dimension of transactions. Strengthening good faith contributes not only to legal certainty but also to maintaining the trust framework that forms the essence of every healthy commercial activity.
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