Good faith/Bad faith

Is bad faith written or implied?

Bad faith is not written, but it is implied through actions in relation to the contract.

What are several examples of bad faith?

Failure to cooperate Exercise of discretionary power for the wrong purpose (e.g., firing someone in order to retaliate) - Ex. terminating employment at will to retaliate for whistleblowing

The 4 major attempts to define good and bad faith?

Good faith: a good state of mind. Honesty in fact, performing a contract with a good heart (used by second restatement, subjective criteria) Bad faith: violates the rules of fair dealing (objective criteria based on what other people do, used by second restatements) Bad faith: opportunism Bad faith: clearly inefficient behavior (small benefit for actor, large loss for the other party)

Is the duty of good faith implied?

Yes - in every contract. Restatement Second §205: "every contract imposes upon each party a duty to good faith and fair dealing in its performance and enforcement."

Is the duty of good faith mandatory?

Yes - you cannot agree to have no good faith, although you are allowed to set a standard for it - generally contract law is default law, but this is the exception