implied covenant of good faith and fair dealing
- implied covenant of good faith and fair dealing
A general assumption of the law of contracts that a person will act in good faith and deal fairly without breaking her or his word, attempting to avoid obligations, or denying that which was clearly understood. A lawsuit based on the breach of this covenant can be brought when the offending party uses technical excuses for the breach or willfully misconstrues specific words in the contract to refuse her or his obligations when the context and apparent understanding of the parties were to the contrary.
Business law dictionary.
2015.
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