New Jersey Contracts Require Good Faith and Fair Dealing

By Fredrick P. Niemann, Esq. a NJ Contract Attorney

In New Jersey, all contracts are governed by what is called the “implied covenant of good faith and fair dealing.” This law states that all parties involved in commerce must act in good faith and fair dealing cannot act with bad intentions in any part of the transaction. This includes defrauding the other party, withholding information, lying, etc.  Claiming breach of an implied covenant of good faith provides a claim for relief by parties that are victims of all deceptive practices, even when no other relief such as fraud or breach of contract exists. The implied covenant is often relied upon when a party takes advantage of a technicality in the contract or the lack of knowledge on the subject matter by the other party, and refuses to perform their contractual obligations in some manner. The covenant essentially makes sure that all contracts are fair and people can have confidence that if they get deceived, they will always have some sort of remedy.

In order to establish a breach of the implied covenant of good faith and fair dealing, a person must show either bad motive or wrongful intention on the part of the defendant. This can often be a difficult task. Recently, a New Jersey Court held that simply withholding information regarding the developable acreage of property in a contract did not establish bad faith on the part of the sellers. The Court stated that a buyer has reasonable due diligence to investigate the property for themselves. The Court also found that the seller did not even have knowledge that part of the land was undevelopable. They therefore did not have a bad motive or intention to deceive the plaintiff and thus did not breach the implied covenant of good faith and fair dealing.

Establishing a breach of the implied covenant of good faith and fair dealing can be tricky and involves showing specific evidence. More often than not, this requires an experienced New Jersey Contract Attorney who is able to identify and present proper evidence to the Court. If you have any questions regarding a contract transaction or the implied covenant of good faith and fair dealing, please do not hesitate to contact Fredrick P. Niemann, Esq., a knowledgeable NJ Contract Law Attorney. He can be reached toll-free at 855-376-5291 or by email at fniemann@hnlawfirm.com/. Mr. Niemann will meet with you to discuss your matter with you. He looks forward to hearing from you.  For more valuable information go to http://www.youtube.com/user/NJBusinessLaw#p/search/0/zQRtR4wnmHA to learn more.

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