Within the coming months a new bill amending the Retail Leases Act 1994 (NSW) could be introduced to parliament. Discussions surrounding proposed amendments to the Act have increased recently, especially in relation to recommendations made in a 2013 report.

These amendments may include a good faith element being implied into all retail leases unless the duty is expressly excluded by the parties in a contract. This will mean lawyers must ensure their clients are acting fairly and disclosing all relevant information.

The courts in NSW have already implied a contractual duty of good faith in Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234. The proposed amendments would therefore bring statute in line with the common law by requiring parties in leasing agreements:

  • not act unfairly including undermining bargaining;
  • disclose all relevant information in a timely manner;
  • make timely responses to proposals;
  • act reasonably in attending and participating in meetings;
  • genuinely consider the other party‚Äôs proposals;
  • be honest, exercise discretion fairly by not acting arbitrarily;
  • exercise powers reasonably, having regard to the interests of the other party.