The Guide is an invaluable online tool for litigation and transactional attorneys. The Guide provides for more than 70 common law causes of action:

- Each action’s elements;
- The most recent state and federal cases that cite the actions’ elements;
- The applicable statute of limitations for each action; and
- Defenses to each cause of action.
- AND, The Guide is updated annually.

FREE – No credit card or payment required. Testimonials

Breach: 03. Breach Implied Covenant of Good Faith & Fair Dealing

1 Elements and Case Citations

  1. “‘There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.’”

Foley v. Interactive Data Corp., 47 Cal. 3d 654, 684 (1988).

  1. An allegation of breach of the implied covenant of good faith and fair dealing is an allegation of breach of an “ex contractu” obligation, namely one arising out of the contract itself. The covenant of good faith is read into contracts in order to protect the express covenants or promises of the contract, not to protect some general public policy interest not directly tied to the contract's purposes.

Id., at 690; see Guz v. Bechtel National, Inc., 24 Cal. 4th 317,350 (2000)(the covenant “cannot impose substantive duties or limits on the contracting parties beyond those incorporated in the specific terms of their agreement.”).

  1. The covenant is read into contracts and functions “‘as a supplement to the express contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party's rights to the benefits of the contract.’”. . . The covenant also requires each party to do everything the contract presupposes the party will do to accomplish the agreement's purposes. . . . A breach of the implied covenant of good faith is a breach of the contract . . ., and “breach of a specific provision of the contract is not … necessary” to a claim for breach of the implied covenant of good faith and fair dealing.

Thrifty Payless, Inc. v. The Americana at Brand, LLC, 218 Cal. App. 4th 1230, 1244 (2013).

CALIFORNIA STATE COURTS

Supreme Court of California: Guz v. Bechtel National, Inc., 24 Cal. 4th 317,350 (2000).

California 1st Dist.: Storek & Storek, Inc. v. Citicorp Real Estate, Inc., 100 Cal. App. 4th 44, 54-55 (2002).

California 2d Dist.: Thrifty Payless, Inc. v. The Americana at Brand, LLC, 218 Cal. App. 4th 1230, 1244 (2013).

California 3d Dist.: Acree v. General Motors Acceptance Corp., 92 Cal. App. 4th 385. 393 (2001).

California 4th Dist.: Jenkins v. JPMorgan Chase Bank, N.A., 216 Cal. App. 4th 497, 525 (2013).

California 5th Dist.: None.

California 6th Dist.: Molecular Analytical Systems v. Ciphergen Biosystems, Inc., 186 Cal. App. 4th 696, 711-12 (2010).

CALIFORNIA FEDERAL COURTS

United States Court of Appeal for the 9th Circuit: Kelly v. Skytel Communs., Inc., 32 Fed. Appx. 283, 285 (9th Cir. 2002).

Central District: Fields v. QSP, Inc., No. CV 10-5772 CAS (SSx), 2011 U.S. Dist. LEXIS 41350, at *13-14 (C.D. Cal. Apr. 8, 2011).

Eastern District: Yost v. Nationstar Mortg., LLC, No. 1:13-cv-00745-AWI-SAB, 2013 U.S. Dist. LEXIS 128504, at *27-28 (E.D. Cal. Sept. 9, 2013).

Northern District: Rockridge Trust v. Wells Fargo, N.A., No. C-13-01457 JCS, 2013 U.S. Dist. LEXIS 139606, at *107-08 (N.D. Cal. Sept. 25, 2013).

Southern District: Gross v. Metro. Life Ins. Co., No. 12-CV-2478 H (JMA), 2013 U.S. Dist. LEXIS 53677, at *15-16 (S.D. Cal. Apr. 12, 2013).

2 Defenses to Claim for Breach Implied Covenant of Good Faith & Fair Dealing

(1) Cal. Code Civ. Proc. § 431.30(b)(2) (pleading affirmative defenses), and other standard defenses. See Chapter 1 for all defenses.

(2) Statute of Limitations: Cal. Code Civ. Proc. § 337(1) (four years for written contract); see Love v. Fire Ins. Exchange, 221 Cal. App. 3d 1136 (1990); but see Cal. Code Civ. Proc. § 339(1) (two years for oral contract); see Mullins v. Rockwell Int’l Corp., 15 Cal. 4th 731, 737 (1997).

(3) Cannot Invoke to Forbid Contractually Permitted Conduct: “[O]ne cannot invoke the implied covenant to prohibit conduct that a contract expressly allows.” 21st Century Ins. Co. v. Superior Court, 47 Cal. 4th 511, 526-27 (2009).

(4) Tort Only in Insurance Contract: “[T]he tort of breach of the covenant of good faith and fair dealing applies only in the context of insurance contracts.” Harris v. Wachovia Mortgage, FSB, 185 Cal. App. 4th 1018, 1023 (2010); see Chapter __ herein for elements of tortious breach of the covenant of good faith and fair dealing.

(5) See Defenses to Breach of Contract, Chapter __ herein.