To begin, under New York law, “all contracts imply a covenant of good faith and fair dealing in the course of performance.” 511 W. 232nd Owners v. Jennifer Realty Co., 98 N.Y.2d 144, 153 (2002). The implied covenant “embraces a pledge that ‘neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.’” Id. (citation omitted). Further, when a “contract contemplates the exercise of discretion,” the party with discretion is bound by the implied covenant of good faith and fair dealing “not to act arbitrarily or irrationally in exercising that discretion.” Dalton v. Educ. Testing Serv., 87 N.Y.2d 384, 389 (1995). When one party to a contract deceives the other party and delays or prevents the exercise of that party’s contractual rights, that party breaches the implied covenant of good faith and fair dealing. See Richbell Info. Servs., 309 A.D.2d at 302 (“[O]ne has an apparently unlimited right under a contract, that right may not be exercised solely for personal gain in such a way as to deprive the other party of the fruits of the contract”); 25 Bay Terrace Assocs., L.P. v. Pub. Serv. Mut. Ins. Co., 144 A.D.3d 665, 667 (2d Dep’t 2016) (upholding an implied covenant of good faith and fair dealing claim alleging that defendant had prepared a “factually inaccurate” report).

New York courts have held, however, that the implied covenant of good faith and fair dealing cannot negate express provisions or rights in a contract. See Transit Funding Assocs. v. Cap. One Equip. Fin., 149 A.D.3d 23, 30 (1st Dep’t 2017) (finding no breach of implied covenant where “complained-of conduct consists entirely of acts it was authorized to do by the contract”); Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Xerox, 25 A.D.3d 309, 310 (1st Dep’t 2006) (“The covenant of good faith and fair dealing cannot be construed so broadly as to effectively nullify other express terms of the contract, or to create independent contractual rights.”). Moreover, a good faith and fair dealing claim is “redundant if it merely pleads that defendant did not act in good faith in performing its contractual obligations.” Danusiar v. Auditchain USA, No. 20-CV-1477 (KNF), 2020 WL 6126378, at *9 (S.D.N.Y. Oct. 8, 2020).