In all contracts there is an implied covenant of good faith and fair dealing. The purpose of the implied duty of good faith is to protect the parties’ reasonable commercial expectations.
This legal concept is fair and just and can often be relied upon by a party to a contract; however, there are limitations.
This duty of good faith and fair dealing must relate to the performance of an express term of the contract. It is not an abstract and independent term of a contract, which can be asserted to claim a breach when all other terms have been performed pursuant to the contract requirements.
The implied duty of good faith and fair dealing cannot be used to vary or modify a fully specified, unambiguous term of a contract. A court will not do that; it will not apply this legal doctrine in that manner.
