Good Faith Flashcards
The covenant of ______ _____ __________ is contained in all contracts.
good faith and fair dealing
As a result, the _______ _______ cannot inhibit application of the implied covenant of good faith and fair dealing because the covenant is contained in all contracts by operation of law.
parol evidence rule
It imposes absent terms and conditions
Good Faith
Allows redress for the bad faith performance of an agreement even when the defendant has not breached any express term.
Good Faith
Permits inquiry into a party’s exercise of discretion expressly granted by a contract’s terms.
Good Faith
“[t]o determine what is considered a good faith performance, the court must consider the ________ __ ___ ________ and the purpose for which the contract was made.”
expectations of the parties
“[t]he guiding principle in the application of the implied covenant of good faith and fair dealing emanates from the fundamental notion that a party to a contract may not _________ ________ its purpose.”
unreasonably frustrate
It is a contract in which Party A agrees to use the other party’s (Party B’s) goods or services to supply all of Party A’s requirements and Party B agrees to supply all of Party A’s requirements.
Requirements Contract
It is a contract in which Party A agrees to sell all of the goods/services Party A outputs to Party B and Party B agrees to buy all of that output from party A.
Output Contract
means capable of being done, effected, or put into practice, with the available means.
“practicable”
When it is a condition of an obligor’s duty that he be satisfied with respect to the obligee’s performance or with respect to something else, and it is practicable to determine whether a reasonable person in the position of the obligor would be satisfied, an interpretation is preferred under which the condition occurs if such a reasonable person in the position of the obligor would be satisfied.
SatisFaction Clauses
Where a contract confers on one party a __________ power affecting the rights of the other, a duty is imposed to exercise that discretion in good faith and in accordance with fair dealing.
discretionary
In every contract there is an _________ ______ 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.
implied covenant
When it is a condition of an obligor’s duty that he or she be _________ _________ with respect to the obligee’s performance, the subjective standard of honest satisfaction is applicable.
subjectively satisfied
Where the contract involves _______ __ _______, taste or judgment, the promisor is the sole judge of his satisfaction.
matters of fancy
