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Traders & General Insur- ance Co.,20 the California Supreme Court recognized that breach of the implied covenant of good faith and fair dealing in insurance contracts could constitute a tort.
The implied covenant of good faith and fair dealing is automatically included in every contract and cannot be waived by the parties.
In a promissory estoppel case, the court in its discretion can award either detrimental reliance damages or expectation damages (including specific performance), whichever it determines better avoids injustice.
Breach of contract is not an equitable remedy. If one has a breach of contract claim, then you cannot typically file an accompanying promissory estoppel claim. Specifically, promissory estoppel is not available when an unambiguous contract exists that covers the issue for which damages are sought.
The implied covenant is a tool of contract interpretation meant to ensure that the parties' reasonable expectations are fulfilled. The implied covenant prevents a party to a contract from violating the spirit of the contract, even if the contract does not expressly prohibit the party's actions.
Promissory estoppel is the legal principle that a promise is enforceable by law, even if made without formal consideration when a promisor has made a promise to a promisee who then relies on that promise to his subsequent detriment.
In every contract there is an implied covenant of good faith and fair dealing by each party not to do anything which will deprive the other parties of the benefits of the contract, and a breach of this covenant by failure to deal fairly or in good faith gives rise to an action for damages.
There cannot be a written contract, for there to be promissory estoppel. Although you can sue for both, ultimately, a Plaintiff in a court case will have to choose between estoppel or breach of contract if there is a written agreement.
An agreement made by promissory estoppel will typically have the same binding effects on parties that a valid contract would. If a party breaches an obligation created by promissory estoppel, a court can choose to assign either reliance damages or expectation damages.
What Is a Breach of Implied Contract? A legal complaint is created when one party to an implied contract breaches the agreement. A breach doesn't need to be defined in a verbal or written agreement. Instead, it can be any negligence of principal, law, or obligation.