Implied Covenant of Good Faith and Fair Dealing

elderly businessman shaking hands with partner
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According to the Supreme Judicial Court, “every contract in Massachusetts is subject to an implied covenant of good faith and fair dealing.”  Anthony’s Pier Four, Inc. v. HBC Associates, 411 Mass. 451, 471.

This means “that neither party shall do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.”  Id. 471-472.

“Whenever the cooperation of the promisee is necessary for performance of the promise, there is a condition implied that the cooperation will be given.”  Robert & Ardis James Foundation v. Meyers, 474 Mass.  181, 191.

The covenant is breached when one side is “ignoring and declining to honor…clear, rational, and good faith efforts…to resolve the contractual relationship between the parties.” Id. 189.

If you have any questions about contract law please contact me via email at justin@jrmccarthy.com.

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