Compass Group UK and Ireland Ltd (trading as Medirest) v Mid Essex Hospital Services NHS Trust [2012] EWHC 781

The contract obliged the parties to a long term facilities agreement to “co-operate with each other in good faith”. The Trust in this case had the right to terminate Medirest’s engagement because Medirest had exceeded the number of permitted “service failure points”, but the key question was whether Medirest also had the right to terminate owing to a breach of the obligation to act in good faith.

The Court held that it was; the Trust had breached a material obligation to act in good faith (having prepared “patently absurd”, “cavalier”, “indefensible” calculations of service credits under the contract).