Opinion ID: 195233
Heading Depth: 1
Heading Rank: 3

Heading: the implied covenant claim

Text: 40 Appellant next claims that ELC breached an implied covenant of good faith and fair dealing when it refused to proceed with the alleged contract, and, adding insult to injury, gave apocryphal reasons for its refusal to perform. When, as now, a duty of good faith and fair dealing is alleged to arise from a contractual relationship, a claim for breach of that duty sounds in contract rather than in tort. See Bertrand v. Quincy Market Cold Storage & Warehouse Co., 728 F.2d 568, 571 (1st Cir.1984). This, in turn, dictates choice of law: the same substantive law that governs the contract claim also governs the implied covenant claim. 41 In this instance, then, Rhode Island law controls. Rhode Island recognizes that virtually every contract contains an implied covenant of good faith and fair dealing between the parties. See A.A.A. Pool Serv. & Supply, Inc. v. Aetna Cas. & Sur. Co., 121 R.I. 96, 395 A.2d 724, 725 (1978); Ide Farm & Stable, Inc. v. Cardi, 110 R.I. 735, 297 A.2d 643, 645 (1972); see also Fleet Nat'l Bank v. Liuzzo, 766 F.Supp. 61, 67 (D.R.I.1991); Landry v. Farmer, 564 F.Supp. 598, 611 (D.R.I.1983). Because the implied covenant exists so that the contractual objectives may be achieved, Ide Farm, 297 A.2d at 645, it necessarily follows that where there is no contract, there is no duty. In such circumstances, there is nothing from which the covenant can be implied. Or, phrased differently, the law does not require persons to act in particular ways in order to achieve illusory contractual objectives. 42 On this basis, the covenant is left without visible means of support, and no claim for a breach of it will lie. See Jordan-Milton Mach., Inc. v. F/V Teresa Marie, II, 978 F.2d 32, 36 (1st Cir.1992); cf. Gleason v. Merchants Mut. Ins. Co., 589 F.Supp. 1474, 1477 (D.R.I.1984) (applying same principle in insurance context).