(ii) Abuse of rights

A typical example of behaviour contrary to the principle of good faith and fair dealing is known in some legal systems as “abuse of rights”.[1] In particular in the Roman legal systems (and Swiss law), various manifestations that violate the principle of good faith are called “abuse of rights”. The term refers to a party’s bad faith, opportunistic or unjustifiable behaviour, for example when a party exercises a right merely to damage the other party, or to serve a purpose other than the purpose for which the right had been granted, or when the exercise of a right is disproportionate to the originally intended result.

Illustration 5 (from two options exercising the contractual remedy that is unnecessary and excessively burdensome).

T rents premises from L for the purpose of setting up a retail business. The rental contract is for five years, but when three years later T realises that business in the area is very poor, it decides to close the business and informs L that it is no longer interested in renting the premises. T’s breach of contract would normally lead to L’s having the choice of either terminating the contract and claiming damages or requesting specific performance. However, under the circumstances L would be abusing its rights if it required T to pay the rent for the remaining two years of the contract instead of terminating the contract and claiming damages from T for the rent it has lost for the length of time necessary to find a new tenant.

Illustration 6 (requiring a remedy where less burdensome options are available).

R rents premises from L for the purpose of opening a restaurant. During the summer months R sets up a few tables out of doors, but still on the owner’s property. On account of the noise caused by the restaurant’s customers late at night, L has increasing difficulties finding tenants for apartments in the same building. L would be abusing its rights if, instead of requesting R to desist from serving out of doors late at night, it required R not to serve out of doors at all.

[1]           In French abus de droit, in Italian abuso del diritto, in Spanish abuso del derecho, in German Rechtsmissbrauch, in Dutch misbruik van recht.