Performance of Contracts in Good Faith under Syrian Law
A Legal Safeguard for Transactional Stability and Contractual Justice
The stage of contract performance is the real practical test of the contractual relationship; it is where obligations move from written drafting into the reality of dealings between the parties. Disputes often arise not from the terms of the contract itself, but from how one contracting party acts when performing its obligations or exercising its contractual rights.
This is where the importance of the principle of good faith emerges, as a binding legal rule that does not merely require contracting parties to comply with what is expressly stated in the contract, but also requires them to perform their obligations in a manner consistent with integrity, cooperation, and the lawful purpose on which the contract was based.
This article addresses the concept of performing contracts in good faith under Syrian law, its effect on the interpretation and performance of contracts, its principal practical applications, and its relationship to abuse of rights and the burden of proving its breach.
What is meant by performing a contract in good faith?
Good faith in contract performance means that each party must act with integrity, honesty, and cooperation, so that it does not merely perform the obligation formally, but performs it in a way that achieves the lawful purpose intended by the contracting parties.
Accordingly, the obligation of good faith is not confined to the literal meaning of contractual clauses; it extends to what the nature of the obligation, custom, and the requirements of justice demand, preventing harm to the other party or the exploitation of contractual loopholes to secure unlawful gains.
Legal basis:
Civil Code Article 149 provides:
“A contract must be performed in accordance with its contents and in a manner consistent with the requirements of good faith.”
This provision is a general rule applicable to various civil and commercial contracts, unless a special provision provides otherwise.
What does the principle of good faith require of contracting parties?
The principle of good faith imposes conduct-related obligations inherent in contract performance, most notably:
Cooperation between the parties to achieve the purpose of the contract.
Refraining from any act that obstructs contract performance without lawful justification.
Providing material information that affects performance of the obligation.
Avoiding abuse of contractual rights.
Preserving the balance on which the contract was based.
Good faith thus becomes an objective legal standard for assessing the conduct of contracting parties, rather than a mere moral directive or general ethical rule.
Good faith does not mean relinquishing rights:
It is a misconception that good faith requires an injured party to be lenient about or waive its rights.
The correct position is that good faith does not prevent a contracting party from claiming its rights or resorting to the courts; rather, it restricts the manner in which those rights are exercised, so that they do not become a means of harming the other party or obtaining an unlawful benefit.
Claiming a lawful right is one thing; abusing it is another.
Practical applications of the principle of good faith:
First: construction contracts.
If technical circumstances arise during performance that require changing the method of work, good faith requires exchanging the necessary information and cooperating to reach an appropriate solution, rather than exploiting the situation to obstruct the project or impose unjustified burdens on the other party.
Second: supply contracts.
If the supplier knows of a delay beyond its control, good faith requires it to notify the buyer immediately and enable the buyer to take the necessary measures to mitigate the damage, rather than concealing the information until the consequences worsen.
Third: lease contracts.
Good faith requires both the lessor and the lessee to cooperate in performing the contract; the lessor may not obstruct the lessee’s enjoyment of the leased property, and the lessee may not use the leased property in a manner contrary to the agreed purpose or causing harm to the lessor.
Fourth: company contracts.
In company contracts, good faith requires partners to disclose material facts affecting the company’s interest and to refrain from exploiting inside information to achieve personal interests at the expense of the company or the other partners.
When is a party deemed to be acting in bad faith?
The court infers bad faith from the circumstances of each case and the conduct of the contracting party during performance. The principal indicators include:
Intentional refusal to perform an obligation without lawful cause.
Obstructing contract performance to obtain additional gains.
Exploiting ambiguity in a contractual clause in a manner contrary to the purpose of the contract.
Concealing material information affecting performance.
Providing incorrect information during contract performance.
Exercising a contractual right with the intention of harming the other party.
In these cases, contractual liability may arise for the breaching party once it is established that its conduct caused harm to the other party.
Effect of good faith on contract interpretation:
The effect of good faith is not limited to the performance stage; it also extends to the interpretation of contractual clauses where there is ambiguity or multiple possible meanings.
Articles 151–152 distinguish clear wording, the search for common intention where interpretation is needed, and residual doubt. Good faith should not be presented as a free-standing power to replace a clear bargain with whatever appears more balanced.
The relationship between good faith and abuse of rights:
Good faith is closely connected to the prohibition of abuse of rights. It is not enough for a right to be established by the contract; it must be exercised within limits consistent with its lawful purpose.
A party may have a right provided for under the contract, but exercising it with the intention of harming the other party or securing an unlawful benefit may render that exercise abusive and give rise to liability.
Therefore, when hearing contractual disputes, the courts do not stop at the existence of the right or the contractual provision; they also consider how it was exercised and the extent to which the contracting party’s conduct is consistent with the requirements of integrity, cooperation, and the lawful purpose of the contract.
Burden of proof:
As a general rule, the burden of proving a breach of the principle of good faith lies with the party alleging that breach.
The court may rely on a range of evidence and indicia in forming its conviction, including:
Email correspondence.
Warnings and notices.
Meeting minutes.
Change orders.
Technical reports.
Witness testimony.
The parties’ conduct during contract performance.
This evidence is assessed as a whole to determine the true nature of the disputed conduct and whether it is consistent with, or contrary to, the requirements of good faith.
How can disputes relating to contract performance be avoided?
To reduce disputes related to contract performance, it is advisable to observe the following:
Draft obligations clearly and precisely.
Document all correspondence and subsequent agreements.
Give immediate notice of any circumstance affecting performance.
Keep a record of all procedures and documents.
Address disagreements in their early stages before they escalate.
Have contracts reviewed by a legal specialist when amending or performing them.
This means…
Performing a contract in good faith is not an abstract moral principle, but a binding legal rule in the Syrian Civil Code. It requires contracting parties to perform their obligations with integrity and cooperation, in a manner that achieves the lawful purpose of the contract and preserves the balance between rights and obligations.
The importance of this principle lies in moving the contractual relationship beyond mere literal compliance with the text to a broader obligation of lawful conduct, thereby preventing abuse and strengthening trust in transactions.
This article concerns good-faith performance of an existing contract under Article 149. Any claim about conduct during negotiations requires a separate legal basis and assessment of the facts.
Note: This article is intended for general legal awareness and does not replace specialized legal advice regarding practical facts or existing disputes.
References
Syrian Civil Code, Legislative Decree No. (84) of 1949, particularly the provisions relating to contract performance, the principle of good faith, and the general principles of obligations.
https://www.wipo.int/wipolex/ar/legislation/details/10917Syrian Legal Encyclopedia – Contract theory, effects of contracts, and performance of obligations under Syrian civil law.
https://arab-ency.com.sy/law