Opinion ID: 2422764
Heading Depth: 2
Heading Rank: 2

Heading: Implied Covenant of Good Faith and Fair Dealing Claim

Text: The defendants next assert that the trial court erred when it found that they breached the implied covenant of good faith and fair dealing. In every agreement, there is an implied covenant that the parties will act in good faith and fairly with one another. Livingston v. 18 Mile Point Drive, 158 N.H. 619, 624, 972 A.2d 1001 (2009). In New Hampshire, there is not merely one rule of implied good-faith duty, but a series of doctrines, each of which serves a different function. Id. The various implied good-faith obligations fall into three general categories: (1) contract formation; (2) termination of at-will employment agreements; and (3) limitation of discretion in contractual performance. Id. This case involves the third category. While the third category is comparatively narrow, its broader function is to prohibit behavior inconsistent with the parties' agreed-upon common purpose and justified expectations as well as with common standards of decency, fairness and reasonableness. Id. (quotation omitted). We will uphold a trial court's determination regarding the breach of the implied covenant of good faith and fair dealing unless it is not supported by the evidence or is legally erroneous. Id. The record supports the trial court's finding that the parties' agreed-upon common purpose and justified expectations included the expectation that their agreement would not expire before July 16, 2009. As discussed above, the record supports the trial court's finding that the parties mutually understood that the contract would expire by its own terms five years after they executed the July 16, 2004 first amended agreement. The record also supports the trial court's finding that the defendants behaved inconsistently with this expectation and, therefore, breached the implied covenant of good faith and fair dealing, when they abandoned their obligations to close on the contract. The record supports the trial court's finding that the defendants worked cooperatively with the plaintiffs for many months to bring the transaction to a close by July 16 and that, at the last minute, even though FCC approval had been obtained, they refused to close on the contract, thereby disrupting the plaintiffs' justified expectations and depriving them of the benefit of the parties' bargain. Because we conclude that the evidence supports the trial court's finding that the defendants breached the implied covenant of good faith and fair dealing and that this finding is not legally erroneous, we uphold it. Id.