Contracts in New York have long been read to contain an implied covenant of good faith and fair dealing which is breached when a party to the contract deprives another contracting party of a right secured by the contract, without breaching an express contract provision.1 While at times a claim for breach of the implied covenant of good faith and fair dealing would seem to pair with a claim for breach of contract, New York courts frequently find these claims to be duplicative when pleaded together, resulting in dismissal of the good faith claim. A number of recent Commercial Division cases demonstrate the circumstances under which such tandem pleading can and cannot survive.
New York courts generally will dismiss a claim for breach of the covenant of good faith and fair dealing as duplicative if it asserts the same breach or relies on the same facts as the breach of contract claim. Courts have also dismissed good faith breach claims where they are seen as an element of the breach of contract claim, for example where the bad faith was part and parcel of the alleged breach of contract. Finally, courts have dismissed breach of good faith claims where they seek to recover for the same injury as the breach of contract claim. As discussed below, several elements factor into the judicial determination of when good faith and fair dealing breach claims cannot survive alongside breach of contract claims, and thus should be dismissed.
The Implied Covenant
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