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Glen Banks, a partner at Fulbright & Jaworski, writes that a gray area of New York law has been the extent to which a party could claim that the exercise of a right granted by a contract breached the agreement because the right was exercised in "bad faith." He notes that courts recognized the tension between, on the one hand, the imposition of a good faith limitation upon the exercise of a contract right and, on the other, the prohibition on using the implied covenant to create new duties that negate explicit rights under the contract.
December 16, 2008 at 12:00 AM
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