It is a settled principle of New York law that "all contracts imply a covenant of good faith and fair dealing in the course of performance." 511 W. 232nd Owners v. Jennifer Realty Co., 98 N.Y.2d 144, 153 (2002) (collecting cases). Courts have described this covenant as a duty "encompassing any promises which a reasonable person in the position of the promisee would be justified in understanding were included and which are not inconsistent with the contract." This duty "is breached when a party acts in a manner that, although not expressly forbidden by any contractual provision, would deprive the other party of the right to receive the benefits under their agreement." Twinkle Play v. Alimar Properties, Ltd., __ A.D.3d ___, 2020 WL 5540060, *1 (2d Dept. Sept. 16, 2020) (collecting cases; citations and internal quotations omitted).

It is tempting to invoke this duty liberally. After all, most plaintiffs probably believe that the defendant did not act in good faith and/or that the result was unfair. But contract law is all about allowing parties to agree on how their business relationships will be ordered, and courts are loath to make rulings that might vary the terms to which the parties agreed. A party's conduct either breaches the terms of the agreement or it does not; if it does not, that is generally the end of the line for a breach of contract claim. A party seeking to impose an additional duty on the ground that it is "implied" bears a heavy burden.

In short, claims for breach of the duty of good faith and fair dealing fail far more often than they succeed. This article explores some of the nuances that make such claims particularly thorny.