MBE Rules · Contracts
Satisfaction Clauses
Satisfaction clauses
The rule
Conditions of satisfaction are judged objectively for commercial quality or utility, and subjectively — but with good faith required — for matters of personal taste or judgment.
In plain English
Satisfaction clauses in contracts allow a party to decide if they are satisfied with the performance of the other party. For commercial aspects, this satisfaction is judged by an objective standard, while for personal preferences, it is evaluated subjectively, as long as the party acts in good faith.
Worked example
A homeowner hires a contractor to renovate their kitchen, including a satisfaction clause for the design. The homeowner dislikes the color scheme but acknowledges that the renovation meets all commercial standards. The court finds that the contractor fulfilled their obligations, as the homeowner did not act in good faith regarding personal taste.
Memory hook
Satisfaction clauses: objective for quality, subjective for taste, but always in good faith.
The trap
Exams may present scenarios where a party claims dissatisfaction based solely on personal taste without considering good faith, leading to confusion about the standard applied.
How examiners test it
Questions often involve a party expressing dissatisfaction and require candidates to analyze whether the dissatisfaction meets the objective or subjective standard under the satisfaction clause.
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