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An implied obligation that assumes that the parties to a contract will act in good faith and deal fairly with one another without breaking their word, using shifty means to avoid obligations, or denying what the other party obviously understood.
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.
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.
The Duty of Good Faith and Fair Dealing In general, every contract contains an implied duty of good faith and fair dealing. This duty requires that neither party will do anything that will destroy or injure the right of the other party to receive the benefits of the contract.
The covenant imposes an obligation on parties to act in good faith and deal fairly with other parties to the contract, even though this duty is not specifically stated in the agreement.
A party to a contract breaches the implied covenant of good faith and fair dealing by interfering with or failing to cooperate with the plaintiff in the performance of the contract.
The implied covenant of good faith and fair dealing is automatically included in every contract and cannot be waived by the parties.
The elements of a promissory estoppel claim are (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) the reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance. (US Ecology, Inc.