implied covenant of good faith and fair dealing


Also found in: Wikipedia.

implied covenant of good faith and fair dealing

n. a general assumption of the law of contracts, that people will act in good faith and deal fairly without breaking their word, using shifty means to avoid obligations, or denying what the other party obviously understood. A lawsuit (or one of the causes of action in a lawsuit) based on the breach of this covenant is often brought when the other party has been claiming technical excuses for breaching the contract or using the specific words of the contract to refuse to perform when the surrounding circumstances or apparent understanding of the parties were to the contrary. Example: an employer fires a long-time employee without cause and says it can fire at whim because the employment contract states the employment is "at will." However, the employee was encouraged to join the company on the basis of retirement plans and other conduct which led him/her to believe the job was permanent barring misconduct or financial downturn. Thus, there could be a breach of the implied covenant, since the surrounding circumstances implied that there would be career-long employment. (See: implied)

References in periodicals archive ?
Marian Barrraza: $443,299 for (1) breach of contract and (2) breach of the implied covenant of good faith and fair dealing
A Second Cause of Action in the complaint accuses "breach of implied covenant of good faith and fair dealing against InBev.
3) Perhaps Justice Anstead, in his search for a fair and reasonable outcome to the effect of the Miorelli decision, could have relied on the implied covenant of good faith and fair dealing as a part of every contract, public and private.
The lawsuit accuses Aetna of unfair competition, breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment.
Finally, a minority of States has read an implied covenant of good faith and fair dealing into the employment relationship.
The court found that although there was no question that in Massachusetts bad faith required a showing of more than simple negligence, courts in other jurisdictions have recognized that--at least in the context of insurance contracts--a showing that the conduct was "highly unreasonable" or in deliberate disregard of a threatened harm could constitute a breach of the implied covenant of good faith and fair dealing.
Petroleum Marketing Company, established when the implied covenant of good faith and fair dealing would arise in employment cases.
The investigation concerns the Company's announcement that on September 16, 2010, MannKind's former Senior Director of Regulatory Affairs, John Arditi, filed a lawsuit in the Law Division of the Superior Court of New Jersey alleging violation of the New Jersey Conscientious Employee Protection Act, wrongful discharge, breach of contract, breach of the implied covenant of good faith and fair dealing, and intentional infliction of emotional distress.
GEM's claims against CWT, now amended to also include Jean Noelting as defendant, variously include Breach of Agreements, Breach of the Implied Covenant of Good Faith and Fair Dealing, Tortious Interference with Business Relations, Conspiracy to Commit Torts, and Tortious Interference with Contract.
The Complaint alleges and seeks recovery of damages for breach of contract, breach of the implied covenant of good faith and fair dealing, breach of warranty, fraud, tortious interference with contract, tortious interference with business expectancy, misappropriation of trade secrets and violation of the Lanham Act and unfair competition.
in its lawsuit filed against Delco Electronics Corporation, a subsidiary of Delphi Automotive Systems Corporation, on Nelco's claim for breach of the implied covenant of good faith and fair dealing.
The demand for arbitration seeks redress for breach of contract, breach of the implied covenant of good faith and fair dealing, violation of unfair trade practice laws, violations of anti-trust laws, and violations of state franchise laws.