How To Prove A California Breach of Implied Covenant of Good Faith and Fair Dealing Claim

In California, a claim of Breach of Implied Covenant of Good Faith and Fair Dealing is defined as:
A party to a contract breaches the implied covenant of good faith and fair dealing by interfering with or failing to cooperate with the plaintiff in the performance of a contract.
It simply means:
When a party to a contract does not deal fairly with the other parties to the contract.
There are 4 elements of the claim:
- Element 1. The plaintiff and defendant entered into a contract. The plaintiff and defendant made a mutual agreement, outlining their responsibilities and expectations, which is essential for claiming that one party did not act honestly or fairly in fulfilling their part of the deal.
Facts that might support this element look like:
* The plaintiff and defendant engaged in negotiations that culminated in a written agreement outlining the terms of their business relationship.
* Both parties exchanged consideration, with the plaintiff providing services and the defendant agreeing to compensate them as specified in the contract.
* The defendant acknowledged the existence of the contract in multiple communications, confirming their mutual obligations.
* The plaintiff performed their contractual duties as agreed, demonstrating reliance on the defendant’s commitment to the contract.
* The defendant made payments to the plaintiff in accordance with the terms outlined in the contract, further indicating its existence. - Element 2. The plaintiff completed the requirements within the contract or was excused from completing those requirements. The plaintiff either fulfilled all the obligations outlined in the contract or had a valid reason for not doing so, which is necessary to support their claim that the other party acted unfairly or in bad faith.
Facts that might support this element look like:
* The plaintiff fulfilled all contractual obligations by delivering the required services on time and in accordance with the agreed specifications.
* The defendant failed to provide necessary resources, which prevented the plaintiff from completing the contract as originally intended.
* The plaintiff communicated with the defendant regarding obstacles encountered, demonstrating a good faith effort to resolve issues and fulfill the contract.
* The defendant acknowledged the plaintiff’s efforts and indicated that the requirements were met, thus excusing any further obligations.
* The plaintiff was unable to complete the contract due to unforeseen circumstances that were beyond their control, which were communicated to the defendant promptly. - Element 3. The defendant engaged in conduct, separate and apart from the performance of obligations under the contract, without good faith and for the purpose of depriving the plaintiff of rights and benefits under the contract. The defendant acted unfairly and dishonestly, doing things outside of the contract’s terms to intentionally deny the plaintiff their rights and benefits, which violates the expected trust and fairness in their agreement.
Facts that might support this element look like:
* The defendant intentionally delayed payments to the plaintiff, knowing that this would cause financial strain and disrupt the plaintiff’s ability to fulfill their contractual obligations.
* The defendant provided false information about the status of the project, misleading the plaintiff and undermining their trust in the contractual relationship.
* The defendant engaged in negotiations with third parties to undermine the plaintiff’s position, despite having a contractual obligation to prioritize the plaintiff’s interests.
* The defendant unilaterally changed the terms of the agreement without consulting the plaintiff, effectively stripping them of their rights under the contract.
* The defendant failed to communicate critical information regarding project developments, which directly impacted the plaintiff’s ability to perform their duties effectively. - Element 4. The defendant’s conduct caused plaintiff to suffer injury, damage, loss or harm. The defendant’s actions directly led to the plaintiff experiencing harm, such as physical injury, financial loss, or emotional distress, showing that the defendant’s behavior negatively impacted the plaintiff’s well-being or rights.
Facts that might support this element look like:
* The defendant failed to provide the agreed-upon services, resulting in the plaintiff incurring additional costs to secure alternative solutions.
* The defendant’s refusal to negotiate in good faith led to a significant delay in the project, causing the plaintiff to lose a lucrative contract.
* The defendant’s actions created an environment of uncertainty, which directly impacted the plaintiff’s ability to make informed business decisions.
* The defendant’s lack of communication regarding critical changes caused the plaintiff to miss important deadlines, resulting in financial penalties.
* The defendant’s unjustified termination of the agreement deprived the plaintiff of expected revenue, leading to substantial financial harm.
(See Sawyer v. Bank of Am., 145 Cal. Rptr. 623, 83 Cal. App. 3d 135 (C.A. Court of Appeals 1978).)
If you’re in court without a lawyer and plan to assert a Claim of Breach of Implied Covenant of Good Faith and Fair Dealing, having a Personal Practice of Law at Courtroom5 is essential. You’ll need to make informed decisions about what to file at each phase of your case and prepare legal documents supported by thorough legal research and a strong analysis of the facts. Equip yourself with the tools and knowledge necessary to effectively navigate your legal journey.
Prove Your CA Breach of Implied Covenant of Good Faith and Fair Dealing Claim
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