What is a breach of the implied covenant of good faith?

A breach of the implied covenant of good faith is a violation of contract law that occurs when one of the parties to a contract fails to act in an honest and fair manner. This is also known as the implied duty of good faith. In Arizona, an implied covenant of good faith exists in every contract. An implied covenant of good faith requires the parties to the contract to act in a manner that is consistent with the purpose of the contract, rather than acting in an dishonest or unfair manner. For example, if a person enters into a contract to purchase a product from a store, the store would be required to provide that product in a timely manner and at a fair price. If the store does not fulfill its obligations, a breach of the implied covenant of good faith would have occurred. Similarly, if a contract specifies a certain period of time for one of the parties to complete an action, a breach of the implied covenant of good faith would have occurred if the party failed to complete the action within the specified period of time. In Arizona, a breach of the implied covenant of good faith can give rise to a legal claim, allowing the non-breaching party to seek damages or other remedies from the breaching party. If the breach of the implied covenant of good faith is particularly egregious, the court may also award punitive damages, in addition to compensatory damages.

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What is a breach of the implied covenant of good faith?

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