Question 1

What is the implied covenant of good faith and fair dealing in Florida?

Accepted Answer

The implied covenant of good faith and fair dealing is a legal principle automatically included in every Florida contract, whether or not the parties expressly state it. Under this covenant, each party promises to: not do anything that would prevent the other party from receiving the benefits of the contract, act with honesty and fairness in performing contractual obligations, not exercise discretion in a way designed to harm the other party, and cooperate in achieving the contract's purpose. Florida courts enforce this covenant to fill gaps in contracts where the express terms do not address a specific situation.

Question 2

How do Florida courts apply the implied covenant?

Accepted Answer

Florida courts apply the covenant to: prevent one party from using technical contract terms to defeat the other party's reasonable expectations, require cooperation when the contract is silent on a specific obligation, prohibit one party from exercising a contractual right in an unreasonable manner, and fill gaps in contract terms where the parties' intent is unclear. Courts will not, however, use the covenant to: override express contract terms, create obligations that contradict the written agreement, or impose duties that were specifically negotiated out of the contract. The covenant supplements, but does not supersede, the express terms.

Question 3

What damages are available for breach of the implied covenant in Florida?

Accepted Answer

Damages for breach of the implied covenant include: contract damages (the benefit of the bargain that the plaintiff was deprived of by the breach), consequential damages (foreseeable losses resulting from the breach), and potentially attorney fees (if the underlying contract includes a fee-shifting provision). Punitive damages are generally not available for breach of the implied covenant alone, but may be available if the conduct also constitutes an independent tort (such as fraud). The damages are measured as contract damages, not tort damages, because the claim is based on the contractual relationship.

Good Faith Dealing Implied Covenant

Implied Covenant of Good Faith and Fair Dealing

What It Requires

Court Application

Damages

Related Terms

Barnes Walker Contract Law

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