Utah Breach of implied covenant of good faith and fair dealing

“The covenant of good faith and fair dealing inheres in most, if not all, contractual relationships.” Andalex Resources, Inc. v. Myers, 871 P.2d 1041, 1047 (Utah App.1994) (citing St. Benedict's Dev. v. St. Benedict's Hosp., 811 P.2d 194, 199 (Utah 1991)). To comply with the obligation to act in good faith and deal fairly, a party must act consistently with the contract's agreed common purpose and the other party's justified expectations, also arising from the contract between the parties. See St. Benedict's, 811 P.2d at 200. Accordingly, to find a breach of the covenant of good faith and fair dealing, “there must be some type of preexisting contractual relationship.” Andreini v. Hultgren, 860 P.2d 916, 921 (Utah 1993).

Republic Group, Inc. v. Won-Door Corp., 883 P.2d 285, 289 (Utah Ct. App. 1994)

Under the covenant of good faith and fair dealing, the parties constructively promise that they will not intentionally or purposely do anything to destroy or injure the other party's right to receive the fruits of the contract. St. Benedict's, 811 P.2d at 199; Andalex, 871 P.2d at 1047. Compliance with this covenant or duty depends upon the agreed common purpose and justified expectations of the parties. St. Benedict's, 811 P.2d at 200; Andalex, 871 P.2d at 1047. Because these should be determined by considering the contract language, the conduct of the parties, and the course of dealings between them, exactly what obligations Won-Door and Watkins may have owed as part of this covenant depends largely upon the contract in existence at the time. See St. Benedict's, 811 P.2d at 199-200; Andalex, 871 P.2d at 1047-48. Because existence of a contract is in dispute, whether a covenant of good faith and fair dealing has been breached is also necessarily in dispute. Furthermore, good faith and fair dealing are fact sensitive concepts, and whether there has been a breach of good faith and fair dealing is a factual issue, generally inappropriate for decision as a matter of law. Western Farm Credit Bank v. Pratt, 860 P.2d 376, 380 (Utah App.1993).

Republic Group, Inc. v. Won-Door Corp., 883 P.2d 285, 291 (Utah Ct. App. 1994)

¶ 19 As a general rule, every contract is subject to an implied covenant of good faith and fair dealing, under which both parties to a contract promise not to “intentionally or purposely do anything which will destroy or injure the other party's right to receive the fruits of a contract.” St. Benedict's Dev. Co. v. St. Benedict's Hosp., 811 P.2d 194, 199 (Utah 1991). However, we also have stated that “we will not interpret the implied covenant of good faith and fair dealing to make a better contract for the parties than they made for themselves. Nor will we construe the covenant ‘to establish new, independent rights or duties not agreed upon by the parties.’ ” Brown v. Moore, 973 P.2d 950, 954 (Utah 1998) (quoting Brehany v. Nordstrom, Inc., 812 P.2d 49, 55 (Utah 1991)) (other citations omitted). Malibu Inv. Co. v. Sparks, 2000 UT 30, 996 P.2d 1043, 1048