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This means that, even though not specifically stated in the contract, it is implied or understood that each party to the contract must act in good faith and deal fairly with the other party in performing or enforcing the terms of the contract.
Implied Covenant of Good Faith and Fair Dealing Under this exception, an employer typically may not terminate an employee in bad faith or terminate an employee when the termination is motivated by malice.
An employer breaches the implied covenant of good faith and fair dealing by acting in bad faith to prevent an employee from enjoying the benefits of his or her employment contract, thus causing the employee damage. (Foley v. Interactive Data Corp. (1988) 47 Cal.
Section 205 of the Restatement provides that ?every contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement.?
The implied covenant of good faith and fair dealing prevents parties from exercising discretion and performing their contractual obligations in bad faith and in a manner that denies the other party the benefit of its bargain.
Promissory estoppel exists where: ?(1) the promisor made a promise that [it] should have reasonably expected would induce action or forbearance on the part of the promisee; (2) the promisee actually took action or refrained from taking action in reliance on the promise; and (3) injustice can be avoided only by ...