Implied Covenant of Good Faith And Fair Dealing Law and Legal Definition

Implied covenant of good faith and fair dealing is broadly defined as: “Each party to a contract makes the implied promise that each will not do anything to undermine or destroy the other's right to receive the benefits of the agreement. The purpose of the implied covenant of good faith and fair dealing is to ensure that parties act with faithfulness to an agreed common purpose and consistency with the justified expectations of the other party.” L&B Truck Servs. v. Daimler Trucks N. Am. LLC, 2009 U.S. Dist. LEXIS 102128, 12-13 (D. Vt. Oct. 26, 2009)