implied covenant of good faith and fair dealing


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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 ?
The jury did find Toyota liable for the claims of breach of the implied covenant of good faith and fair dealing, awarding approximately $15.8M in total damages, but awarding no punitive damages, the company pointed out.
"In every contract, including the Agreement, there is an implied covenant of good faith and fair dealing," states the complaint, filed in U.S.
The Supreme Court Committee on Standard Jury Instructions in Contract and Business Cases (Committee) has submitted to the Florida Supreme Court a report proposing amendments to the "How to Use this Book" section, and to the following existing jury instructions: 416.4 (Breach of Contract--Essential Factual Elements); 416.20 (Interpretation--Construction Against Drafter); 416.24 (Breach of Implied Covenant of Good Faith and Fair Dealing); 416.25 (Affirmative Defense--Mutual Mistake of Fact); and 416.26 (Affirmative Defense--Unilateral Mistake of Fact).
Cemex filed a lawsuit against the city of Santa Clarita, Calif., claiming breach of contract, civil rights violations, breach of the implied covenant of good faith and fair dealing, and declaratory relief in response to city plans to annex the site of a sand-and-gravel mine in Soledad Canyon.
(2) However, both Florida and Delaware courts look primarily to the plain language of the contract when resolving these disputes and consistently reject litigants' attempts to use the implied covenant of good faith and fair dealing to rewrite agreements or impose extra-contractual obligations.
Plaintiff asserted a number of causes of action, including breach of the limited partnership agreement, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraud and conversion.
Plaintiffs assert claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the New Jersey Consumer Fraud Act ("NJCFA").
The Walt Disney Company (32) ordered studios to pay multimillion-dollar judgments because they violated the implied covenant of good faith and fair dealing by undermining the participant's expectation of receiving net-profit compensation for their work on a successful project.
Tekmira's amended complaint adds new claims alleging breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with contractual relationships, and civil conspiracy.
(9) An implied covenant of good faith and fair dealing is also articulated in [section] 205 of the Restatement (Second) of Contracts.
Nash Finch has answered the complaint, denying any additional monies were due to Roundy's; and asserted counterclaims against the latter for, among other things, breach of contract, misrepresentation and breach of the implied covenant of good faith and fair dealing.