What impact does good faith have on termination of contract

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Reference no: EM132306652

CASE BRIEF 12.5 Sons of Thunder, Inc. v. Borden, Inc. 690 A.2d 575 (N.J. 1997)

FACTS: Borden hired Donald De Musz to captain one of its clam boats. Over time, De Musz formed a business, in reliance upon Borden’s ongoing business, to buy boats and participate in the expensive Shuck-at-Sea program. Eventually, De Musz had borrowed a great deal, spent a great deal only to have Borden pull out of its side of the agreements. De Musz filed suit.

DECISION BELOW: The jury found for De Musz. The Court of Appeals affirmed.

ISSUE ON APPEAL: Was Borden required to compensate De Musz for its abrupt and early termination of the relationship?

DECISION: Yes. The jury award of one year’s profit was fair. Great reliance by De Musz in the situation. Mandated good faith.

Questions

1. Were all the De Musz corporations completely dependent on Borden?

2. What impact does "good faith" have on termination of a contract?

3. What are the damages when there is a lack of good faith in the termination of a contract?

4. What provisions would you suggest be added to a contract such as this in which the relationship is one of contract, but also one of dependence?

Reference no: EM132306652

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