You are here: / / IMPLIED COVENANT OF GOOD FAITH DOES NOT APPLY WHERE THE CONTRACT ALLOWS...

IMPLIED COVENANT OF GOOD FAITH DOES NOT APPLY WHERE THE CONTRACT ALLOWS REFUSAL OF LOANS FOR ANY REASON, EVEN THOUGH THE REFUSAL MAY HAVE BEEN INTENTIONALLY AIMED AT PUTTING PLAINTIFF OUT OF BUSINESS.

The First Department, in a full-fledged opinion by Justice Saxe, modifying (reversing) Supreme Court, determined that a contract provision which allowed defendant (Capital One) to deny loans to plaintiff (TFA) for any reason trumped any implied covenant of good faith and fair dealing, even though defendant’s actions GODDput plaintiff out of business:

Although “[i]n New York, all contracts imply a covenant of good faith and fair dealing in the course of performance” … , the existence of the covenant cannot be relied on as grounds for TFA’s action . The covenant of good faith and fair dealing cannot negate express provisions of the agreement … , nor is it violated where the contract terms unambiguously afford Capital One the right to exercise its absolute discretion to withhold the necessary approval … . Where a contract allows one party to terminate the contract in “its sole discretion” and for “any reason whatsoever,” the covenant of good faith and fair dealing cannot serve to negate that provision … . Notably, where the parties intended to limit either party’s rights under the loan agreement so that they could only be exercised “in good faith,” they specifically included such language; for example, section 1.1 of the agreement allows Capital One to establish a valuation methodology “in its sole and absolute discretion exercised in good faith.” In contrast, the provision of section 2.1 authorizing Capital One to decline any request for an advance “in its sole and absolute discretion” lacks any such limitation requiring Capital One to act in good faith when doing so. Because Capital One’s complained-of conduct consists entirely of acts it was authorized to do by the contract, its alleged motivation for doing so is irrelevant. Simply put, an intent to put TFA out of business cannot justify a lawsuit for a claimed breach of the covenant where the express provisions of the agreement allowed Capital One to act as it did. Transit Funding Assoc., LLC v Capital One Equip. Fin. Corp., 2017 NY Slip Op 01525, 1st Dept 2-28-17

CONTRACT LAW (IMPLIED COVENANT OF GOOD FAITH DOES NOT APPLY WHERE THE CONTRACT ALLOWS REFUSAL OF LOANS FOR ANY REASON, EVEN THOUGH THE REFUSAL MAY HAVE BEEN INTENTIONALLY AIMED AT PUTTING PLAINTIFF OUT OF BUSINESS)/GOOD FAITH, IMPLIED COVENANT (IMPLIED COVENANT OF GOOD FAITH DOES NOT APPLY WHERE THE CONTRACT ALLOWS REFUSAL OF LOANS FOR ANY REASON, EVEN THOUGH THE REFUSAL MAY HAVE BEEN INTENTIONALLY AIMED AT PUTTING PLAINTIFF OUT OF BUSINESS)

You might also like
Denial of Application for Renewal of General Contractor’s Registration Based Upon a Conviction Which Preceded a Prior Renewal Was Arbitrary and Capricious
THE BUILDING OWNER HAD, BY CONTRACT, RELINQUISHED ALL RESPONSIBILITY FOR ELEVATOR MAINTENANCE TO DEFENDANT AMERICAN ELEVATOR AND WAS THEREFORE NOT LIABLE FOR THE ALLEGED ELEVATOR MALFUNCTION; THE PLAINTIFF ALLEGED THE INNER GATE CLOSED ON HER SHOULDER, PINNING HER, AND THE ELEVATOR THEN DESCENDED; A QUESTION OF FACT PURSUANT TO THE RES IPSA LOQUITUR DOCTRINE WAS RAISED (FIRST DEPT). ​
Brazilian Citizens Had Alternative Legal Remedies and Therefore Could Not Use a Writ of Prohibition to Stop a New York Prosecution/The Fact that the Petitioners Would Have to Come to New York to Employ the Alternative Remedies During the Course of a Criminal Prosecution Did Not Render those Remedies Inadequate
RESPONDENT’S FAILURE TO ATTEND INDEPENDENT MEDICAL EXAMS RENDERED THE NO-FAULT INSURANCE POLICY VOID AB INITIO (FIRST DEPT).
BUILDING OWNER NOT LIABLE FOR ALLEGED FAILURE TO ENSURE A SMOKE DETECTOR WAS FUNCTIONAL, DESPITE THE ALLEGATION THE OWNER REGULARLY INSPECTED THE SMOKE DETECTORS (FIRST DEPT).
ARCHITECT’S MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED, THE FACT THAT ANOTHER PARTY PLACED THE ANGLE IRON WHICH INJURED PLAINTIFF IN AN EFFORT TO FIX AN ALLEGED DEFECT IN THE DESIGN OF THE SUBJECT BOILER SYSTEM DID NOT CONSTITUTE A SUPERSEDING CAUSE OF PLAINTIFF’S INJURY AS A MATTER OF LAW (FIRST DEPT).
PROSECUTION’S REVERSE-BATSON CHALLENGE TO PEREMPTORY JUROR CHALLENGES BY THE DEFENSE SHOULD NOT HAVE BEEN GRANTED, CONVICTION REVERSED (FIRST DEPT).
PLAINTIFF PHYSICIAN SUFFICIENTLY ALLEGED HE WAS TERMINATED IN VIOLATION OF LABOR LAW 741, PLAINTIFF EXPRESSED HIS DISAGREEMENT WITH DEFENDANT HOSPITAL CORPORATION’S POLICY THAT THE RESIDENTIAL DRINKING WATER OF PATIENTS DIAGNOSED WITH LEGIONNAIRE’S DISEASE SHOULD NOT BE TESTED (FIRST DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

Copyright © 2023 New York Appellate Digest, LLC
Site by CurlyHost | Privacy Policy

PROPERTY OWNERS’ FRAUD AND OFFICIAL MISCONDUCT COUNTERCLAIM SHOULD HAVE... ALTHOUGH THE CHILD HAD NOT BEEN HARMED, MOTHER’S MENTAL ILLNESS JUSTIFIED...