Good Faith and Fair Dealing

Good Faith and Fair Dealing

In Gresh v. Waste Services of America, Inc., 738 F. Supp.2d 702, 710-11 (E.D. Ky. 2010), the court set forth the effect of the obligation of good faith and fair dealing:

Second, under Kentucky law, parties have a duty in carrying out a contract to act in good faith, sincerely and without deceit or fraud.  Pearman v. W. Point Nat’l Bank, 887 S.W.2d 366, 368 n. 3 (Ky. Ct. App. 1994).  This is generally observed as the covenant of good faith and fair dealing implied in every contract.  Ranier v. Mount Sterling Nat’l Bank, 812 S.W.2d 154, 156 (Ky. 1991).  A breach of the implied duty of good faith and fair dealing is an impossibility where a contract has not yet been formed.  Quadrille Bus. Sys. v. Ky. Cattlemen’s Assoc., Inc., 242 S.W.3d 359, 364 (Ky. Ct. App. 2007).  “A contracting party impliedly obligates himself to cooperate in the performance of this contract and the law will not permit him to take advantage of an obstacle to performance which he has created or which lies within his power to remove.”  Ligon v. Parr, 471 S.W.2d 1, 3 (Ky. 1971) (quoting Gulf, Mobile & Ohio R.R. Co. v Ill. Cent. R.R. Co., 128 F. Supp. 311, 324 (N.D. Ala. 1954)).