Massachusetts Law Review

Massachusetts Law Review

The Duty of Good Faith and Fair Dealing in Commercial Contracts in Massachusetts

In Massachusetts, the duty or covenant of good faith and fair dealing in all contracts is well-established. Despite its time-honored status, however, its scope and application remain elusive and ill-defined. Instead of setting forth a definitive standard or criteria for assessing challenged conduct, courts have opted to address claims on an individualized, fact-specific basis. The elusiveness stems from the controversy that the principle of good-faith performance engenders in the law of contracts. Hailed by some as an indispensable measure of "contractual morality,"1 it is referred to by others as a "chameleon,"2 as well as an unwarranted invitation to the judiciary to impermissibly intrude into freedom of contract.3 This article reviews both the historical underpinnings and recent case developments as to the duty of good faith and fair dealing in commercial contracts in Massachusetts and the underlying tension between implied obligations of good faith and fair dealing and the right of parties to construct their bargains free from judicial or external notions of good faith.

©2014 Massachusetts Bar Association