Friday, September 19, 2014


Generally, a contract spells out the rights and obligations of the parties, and the consequence of breach is liability for the foreseeable damage that directly flow from that breach.  There are no emotional distress damages, lost time is generally compensated for through statutory interest calculated as of the date of the breach, and the contract itself frequently defines the value of the loss.  

In addition to what is written (assuming you are dealing with a written agreement), every contract also contains an implied covenant of good faith and fair dealing, wherein both parties are deemed to agree - even if not expressly in the contract - not to do anything which deprives the other party of the benefit of the agreement. 

The typical and most common example of bad faith (and the easiest to explain) is in the insurance context. One scenario, a litigant is exposed to damages beyond the policy limits (for example, a bad injury in a car accident that goes beyond the typical auto policy limits), but the insurer gambles with its client's money and refuses to settle within the limits, resulting in personal liability to the insured.  Another scenario is baseless denial of claim for business interruption coverage, where the nature of the insurance is to timely compensate for lost income needed to keep the business afloat.  

Under these scenarios, where there is bad faith, the damages party can reach beyond the contract and receive indemnification above the policy limit, or compensation for damage to their business beyond just the lost income during a period of interruption.

I have handled a number of these cases, including a recent jury trial involving a fight over funds held in escrow following a real estate transaction.  Contract disputes, and business litigation matters in general, from my perspective, tend to be intellectually stimulating.  Business litigation is already a large part of my practice, and I would like to see that portion of my practice grow in the future.  If you are looking for an attorney to represent you or your company in a business matter, it would be my pleasure to speak with you to see of I can be of assistance.

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