What is an implied covenant of good faith?

An implied covenant of good faith is a legal doctrine in the state of West Virginia that states that both parties involved in a contractual agreement must act in good faith in regards to the obligations and duties they have agreed to. This covenant is implied by law and does not have to be explicitly stated in the contract to be valid. The implied covenant of good faith is important because it ensures that each party to a contract is acting honestly and fairly while fulfilling their obligations. Without this covenant, either party could take advantage of the other without fear of repercussions. This would undermine the trust that is essential between the two parties and would make contractual agreements much less secure. The implied covenant of good faith also plays an important role in the interpretation of contracts. When the terms of a contract are unclear, the courts will consider whether either party acted in good faith when making the agreement. If the parties did not act in good faith, the court will likely interpret the terms of the contract in favor of the wronged party. The implied covenant of good faith is an important part of contract law in West Virginia and is essential in protecting both parties rights when it comes to contractual agreements. This covenant ensures that both parties are active in fulfilling their obligations and that neither party will take advantage of the other.

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