Negotiating a cross-border, U.S./U.K. advertising agency services agreement adds some additional wrinkles to the already well-wrinkled list of considerations for every ad agency contract. Obviously, extra consideration must be paid to things like privacy and data security, but more prosaic considerations include termination with/without cause, choice of law, and whether to arbitrate disputes. While all commercial contract negotiations are, to some degree, an attempt to see into the future and address foreseeable disputes, knowing the differences between U.S. and U.K. law can be highly beneficial to clients involved in these situations.   

U.S. vs. U.K. Contract Law: Good Faith Differences

There is a significant distinction between U.S. and U.K. law with respect to, very simply, acting “fairly.” The U.S. legal system widely imputes in all contracts the concept of an implied covenant of good faith and fair dealing, where parties are obligated to act in good faith with respect to the other party. This concept, however, is not recognized by the U.K. legal system. For U.S. companies operating under a contract governed by U.K. law, it may be that the parties have more freedom to act in a way that would be perceived as unfair, as long as a strict reading of the contract would permit such unfair conduct.