Also known as: bad-faith breach · bad faith breaches · breach in bad faith · bad faith
Written by attorneys · grounded in primary & secondary sources — see below
Conduct by a contracting party that deliberately violates the implied covenant of good faith and fair dealing.
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Bei Bai filed a state-court suit against Benson Motors for underpayment on an insurance claim. More than a year later, after learning the amount in controversy exceeded the diversity threshold, Benson Motors sought removal. The district court denied the petition because Bei Bai had deliberately kept damages allegations vague to block removal.
Brenda Booth sued Blue Horizon Industries for breach of a supply contract. At trial she offered secondary evidence of a key invoice after claiming the original was lost. The court excluded the evidence because Brenda had destroyed the original in bad faith to hide unfavorable terms.
Bianca Baker threatened to sue Boubacar Bah for an unrelated debt unless he signed a release of his contract claims against her. Because the threat of civil process was made in bad faith, the resulting release was unenforceable as an improper modification.
Brooke Bryant, trustee of a family trust, sold trust assets to herself at a below-market price. The trust instrument contained an exculpatory clause, but the court refused to enforce it because Brooke's self-dealing constituted a breach committed in bad faith.
Byron Bishop listed property with Birchwood Apparel's broker and accepted an offer from a ready buyer. After the market rose, Byron refused to sign the deed solely to capture a higher price. The broker recovered the commission because the seller's refusal to complete the sale was in bad faith.
Bright Path Foods and its limited partners agreed to a clause shielding the general partner from all liability. The clause was held unenforceable because it purported to exonerate conduct involving bad faith and knowing violations of law.
Punitive damages are unavailable for ordinary breach of contract. Recovery is permitted only when the breach also constitutes an independent tort such as fraud or bad-faith denial of insurance benefits.
No. The implied covenant is breached only when a party acts in bad faith to deprive the other of the fruits of the contract. Mere negligence or aggressive enforcement of express terms is insufficient.
A district court may deny removal filed more than one year after commencement if it finds the plaintiff acted in bad faith to prevent removal, including by deliberately failing to disclose the true amount in controversy.
…the part of the police, the State has the burden to show by a preponderance of the evidence that (1) the police did not act in bad faith for the purpose of hastening discovery of the evidence in question, and (2) that the evidence in question would have been discovered by lawful means." Id. , at 260. As to the first…