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

A breach of the implied covenant of good faith in North Carolina contract law is when a contracting party fails to act in good faith in the performance of the contractual obligations. The contractual obligation itself may not be violated, but the party who is obligated to perform still acts in bad faith. This is a breach of the implied covenant of good faith. When a party to a contract in North Carolina fails to act in good faith, it is a breach of the implied covenant of good faith. The implied covenant of good faith is a legal promise that both parties to the contract will act in good faith towards one another in the performance of their contractual obligations. The implied covenant of good faith does not create any new obligations, but rather reinforces those that already exist in the contract. Examples of a breach of the implied covenant of good faith include a party refusing to part with the goods, services, or security they are obligated to provide under the contract, or a party engaging in unfair practices in the negotiation or performance of the contract. While a party may not be liable for breach of contract for these actions, they can still be liable for breach of the implied covenant of good faith. This means that both parties must act in good faith in their contractual dealings in order to avoid a breach of the implied covenant of good faith.

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