What is a breach of implied covenant? The implied covenant refers to a general assumption in the law of contracts that individuals will deal fairly and interact with one another in good faith without breaking their word. This means that if an individual breaches an implied covenant that he or she has taken questionable means to avoid his or her obligations or denied with the other party clearly understood.

Typical Basis of an Implied Covenant Case

A lawsuit started on the breach of implied covenant is frequently brought forth when one party has been alleging excuses for his or her breach of the contract or using the specific terminology inside the contract to refuse to perform even though the surrounding circumstances and apparent understanding to both parties appear to be the opposite.

Example of a Potential Implied Covenant Case

One such example might include an employer who terminates a longtime employee without any specific cause and says that this is appropriate because the employment contract outlines employment being at the will of the employer. If the employee, however, was encouraged to start working at this company as a result of benefits like a retirement plan or other conduct and actions that could have lead him or her to believe that the job was permanent outside of financial downturn or misconduct, the employee might allege that there has been a breach of implied covenant.

Why These Cases Can Be So Challenging

This is just one example of what a breach of implied covenant case might look like. These cases tend to be difficult, because they rely on evidence and documentation outside of traditional contracts. It’s a good idea to be in touch with a business attorney to discuss possible risks associated with being exposed to cases of breach of implied covenant. Businesses or individuals could be involved in behavior that might be construed as an implied covenant. Having a relationship established with a business litigation attorney in Arizona can help you if you find yourself named in a suit involving breach of implied covenant. How you respond to a claim like this can impact the outcome of the case, so do not ignore it or attempt to resolve the issue on your own.

In complex situations like this, it is important to hire an experienced attorney who can help you further with business disputes associated with breach of implied covenant. Hire an Arizona commercial litigation attorney as soon as possible.

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding What Is a Breach of Implied Covenant, or any other litigation matter, please feel free to contact Stockton D. Banfield at 480.461.5356, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.