How to Sue for a Breach of Good Faith and Fair Dealing

Most states have contract laws that provide an implied promise for the parties to act in good faith and engage in fair dealing. This means that even if the language is not written in the contract itself, the law will require the parties to the contract to exercise their discretion and act reasonably under the terms of the contract.^{[1]XResearch source} Disputes over breach of good faith and fair dealing often arise when one party to the contract has the right either to accept or reject the other party's work under the contract.

Part 1

Part 1 of 4:

Determining If a Breach of Good Faith has Occurred

In legal terms, a “breach” is what happens when someone is expected or required to do something, and then he or she fails to do that. This obligation may be something that is required by a contract, by some written laws or statutes, or by generally accepted rules of society. A common mistake is to file a complaint without clearly identifying what you claim the other party failed to do.
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Decide the legal "theory" of your case. If you claim that the other party's breach is a requirement of the contract, then you are applying “contract” law.^{[2]XResearch source} If you are suing based on some statute or general societal expectation (for example, the obligation to drive your car safely), then it is “tort” law.^{[3]XResearch source}
- For example, if the contract is for a portrait to be painted of party A's dog, and party A reserves the right to reject the painting if it is not of suitable quality, party A must act in good faith by only rejecting the painting if it falls below a reasonable standard of quality. Similarly, party B must act in good faith and paint a portrait of suitable quality. If either party breaches this standard of care, the other party will have the right to sue under contract law for that breach.
- Suppose you purchase an insurance policy, and when an accident occurs and you have to collect, your insurance company unreasonably refuses to pay your claim without explanation. You might be able to sue the company for the tort of a breach of good faith and fair dealing.
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Discuss the legal theory with an attorney. If you are suing as a breach of contract case, you are probably limited by the terms of the contract for the amount of money you can recover. However, if you are suing as a tort for the offense of breach of good faith and fair dealing, you may be able to recover additional consequential damages from the defendant's failure. This gets to be a pretty technical issue, and you really should consult with an attorney on the difference.^{[4]XResearch source}
- For most small cases like the dog painting, you should probably stick to a contract case and the terms of your contract.
While it is inexpensive to file a lawsuit on your own behalf, handling a lawsuit without legal training is difficult and if you are unsuccessful, you may lose more money than you would have spent on legal advice from an attorney. If your case is worth a significant amount of money, consider discussing the case with an attorney.
In order to have a “contract” that you can enforce in court, you must be able to show that there was a clear agreement between you and another individual or company for something to be done. A contract does not always have to be written, but if it is, you will have an easier time enforcing it in court. Read the contract terms carefully and be sure that you can clearly identify the requirements that you claim the other party failed to do. This will be the basis of your complaint.^{[5]XResearch source} The requirement of “good faith and fair dealing” will apply to the way that you interpret the terms of the contract.
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Part 2

Part 2 of 4:

Preparing the Original Papers to Start Your Case

If the dispute is over something small, you may be able to handle it on your own, but if the case is larger and more important, you should consider getting a professional.
Many states have a website with information for “pro se” (unrepresented) litigants. This website will provide you with the information and materials you will need to file a lawsuit. Most websites contain information such as the names and addresses of the courts, forms for you to fill out, and basic information about the law and court procedure. If your state does not have such a website, or if it does not contain the information you need, either call or visit the court clerk's office and they can usually assist you in obtaining the appropriate information.
3
Prepare the complaint. Every lawsuit begins with filing a complaint. A complaint is a document that tells the defendant why you have filed the lawsuit and what you are asking the court to do, for example, asking the defendant for money damages. If you check with the clerk's office or various sites online, you can probably find a blank form for a complaint. You will see that the complaint is supposed to be formatted in a particular way and contain certain basic information:
- The name of the court should appear at the top of the first page.
- The names of the parties in the case, such as “John Smith, Plaintiff, vs. David Goliath, Defendant.”
- The title of the document, which will be simply “Complaint” or perhaps “Complaint for Breach of Good Faith and Fair Dealing.”
- Numbered paragraphs. Each individual statement that you make should appear as a separate paragraph, and each paragraph should be numbered. This will make it easier to refer to specific claims later in the case.
- Your signature, at the end.
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Include the elements of the breach of good faith and fair dealing. In order to have a case for a breach of good faith and fair dealing, you must at least allege the following elements of the case, and then be able to prove them in court:^{[6]XResearch source}
- that you and the defendant entered into a binding contract
- that you did everything that you were required to do according to the contract. You should then list the requirements and when and how you did them.
- that the defendant unfairly or unreasonably failed to perform his or her part of the contract. You should then list specifically what the contract required the defendant to do, and explain why any actions he or she took were not sufficient.
- that you suffered “harm” based on the defendant's failure to comply with the contract. If you have lost money, explain how much. If you lost some financial opportunity, explain what you lost and what the value would be.
- Include any other facts that are relevant. These are the basic elements of your case, but if you need to explain more in detail, you can include that detail in your complaint.
A summons is a document that tells the defendant that you have started a lawsuit against him or her. It will include information about the title of the case, the case number, and, most important, will inform him or her when and where to file a response to your complaint, called an answer.^{[7]XResearch source} The summons is usually a form that you get from the court clerk, either by filing an application or when you submit your complaint.^{[8]XResearch source} You will need to talk to the clerk about the procedure in your court.
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Part 3

Part 3 of 4:

Filing and Serving the Complaint and Summons

In most courts, filing a complaint requires a filing fee. You should call the court clerk's office or check your court's web site to determine what your fee is. Find out what forms of payment are acceptable as well. Not all courts will be able to accept cash or personal checks.
Again, contact the court clerk for the requirements of the court in which you are filing your complaint. It is common to be required to file multiple copies of any document.
3
File the complaint with the clerk's office. Usually, it is best to file a complaint in person. That way, if you find out that you are missing anything, you will be able to take care of any problem right there. The clerk will take your copy and assign a case number.
- Take an extra copy along and ask the clerk to “date-stamp” it for you. This will be your proof of filing, in case any problem arises later. Write down your assigned case number and be sure to use it on all future documents in the case.
- If you choose to file your complaint by mail, include an extra copy (one more than the court requires) and include a request in your cover letter for the clerk to “date-stamp” the complaint, to add the assigned case number, and then to return the stamped copy to you. Be sure to provide a self-addressed return envelope with enough postage to include a single copy of the complaint.
- Some courts require a cover page with certain identifying information and a summary of the case. Find out if this applies and get it ahead of time.
“Service” means delivering a copy to the other party in the case. You generally must serve a complaint and summons by personal delivery, in hand, to the defendant. It must be delivered by someone over 18 who is not a party to the case. This means that you cannot do it yourself. You can have a friend or relative do it. If you are represented by an attorney, then the attorney's office will take care of it. You can also hire a constable or marshal. These are professionals who perform this sort of service.
5
Complete a “Certificate of Service.” This is a brief statement, usually on a separate sheet of paper or sometimes added to the bottom of a document, that is your legal statement that you have served the document (you will identify it by name) to the other party.
- A sample Certificate of Service will say something like, “I certify that on March 23, 2016, I served the defendant John Smith with a copy of the Complaint by delivering it to him in hand at his address, 123 Main Street, Anytown, USA.” Then you need to sign it.
- Some courts require particular forms as an “Affidavit of Service” with further information, even including a physical description of the person who was served with the complaint.^{[9]XResearch source} You need to check with the clerk to find out what the requirements are in your court.
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Part 4

Part 4 of 4:

Continuing with the Lawsuit

An “answer” in a lawsuit is the defendant's response to your complaint. If your complaint was properly drafted with numbered paragraphs, then the answer should use the same numbering system and consist of a series of responses in which the defendant either admits or denies the allegations you have made. By reviewing the defendant's answer, you can focus in on exactly where the dispute lies.^{[10]XResearch source}
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Conduct discovery to gather additional information. “Discovery” is your opportunity to get information from the defendant before the case goes to trial. Depending on the court you are in, there may be particular rules or procedures for conducting discovery. For example, cases in small claims court typically do not include lengthy discovery periods, if any. You should check with the court clerk or any printed local rules for the court where you have filed your complaint.^{[11]XResearch source} If you are in a case that requires extensive discovery, you really should be working with an attorney. The rules of discovery can be very exacting, and if you fail to comply correctly, you could risk the outcome of the case. During discovery you will generally be able to use the following tools:^{[12]XResearch source}
- Informal investigations, which will include witness interviews, collecting publicly available documents, and taking photographs.
- Depositions, which are formal interviews with parties and witnesses. The interviews are conducted under oath and answers can be used in court.
- Interrogatories, which are formal written requests to parties and witnesses. The other party and witnesses must answer these questions under oath and their answers can be used in court.
- Requests for the production of documents, which are formal requests for documents you would otherwise not have access to. Examples of documents include bills, emails, texts, and internal memorandums.
- Requests for admissions, which are focused statements written to the other party. The other party must either admit or deny each one.
3
Oppose any motion for summary judgment. After discovery is complete, the defendant will likely file a motion for summary judgment to try and end the litigation before trial. To be successful, the other party will have to persuade the judge that there are no genuine disputes of material facts and that they are entitled to judgment as a matter of law. In other words, the other party must show that, even if the judge made every factual assumption in your favor, you would still lose the court case.
- To successfully oppose a motion for summary judgment, you will submit evidence and affidavits showing the court there are genuine disputes of material facts that need to be worked out at trial.^{[13]XResearch source}
- If the defendant has filed counter-claims against you, you might choose to file your own summary judgment motion on those issues.
4
Be open to the possibility of settlement along the way. At any time in the process, but especially after summary judgment, you may try to end the case by way of settlement. Keep in mind what you are trying to collect, but also the added expense of the time and money of the trial. It is often better to accept a settlement for an amount that might be less than full payment in order to avoid the uncertain outcome of a trial.^{[14]XResearch source}
- If informal settlement negotiations fail, you might try mediation or arbitration. In mediation, a neutral third party will sit down with you and the defendant to discuss common goals. The third party will not take sides and will not offer opinions. During arbitration, a judge-like third party will listen to both parties present their case. At the end, the third party will offer his or her opinion on the case and will offer a possible award.
- If you and the defendant reach an agreement, one of you will need to draft a “Settlement Agreement” that includes whatever terms you have agreed to and notifies the court that the case can be closed. This will need to be signed by both of you and filed with the clerk's office.
If settlement negotiations fail, you and the other party will take part in one final pretrial conference before the trial starts. Before and during this conference, you and the other party will agree to a trial schedule and road map. When you come to this conference, be prepared to raise every issue you want to discuss at trial. If you fail to bring up any issue and it doesn't make it on the road map, you may not be able to bring it up at trial.^{[15]XResearch source} Therefore, be very careful and thorough when taking part in this conference.
6
Prepare for trial. At some point after discovery, the court will notify you with a date for a hearing or trial. Depending on the court you are in, the trial may be more or less formal. For example, in some small claims cases, you and the defendant may just meet in a conference room with a judge or clerk magistrate. In any case, you should still seriously prepare to present you case. Some suggestions for being ready for a trial include:^{[16]XResearch source}
- Meet all deadlines along the way. There will be paperwork that you need to respond to from the other party, as well as notices from the court with various deadlines. Be sure to comply with all instructions on time.
- Attend court and watch some other trials. Most trials are open to the public, and you can go watch some cases going on and get a feel for the process.
- Study your own case thoroughly. Make sure you fully understand your contract, your evidence, the issues, and everything else that is a part of your case.
- Write an outline for the trial. If you have a lot of evidence or many witnesses, you may need to keep a notebook.
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Attend the trial and present your case. If you invoked your right to a jury, you will choose that jury during a process called "voire dire." Once the jury is empaneled, the trial will begin with opening statements. During opening statements, you and the defendant will have an opportunity to provide the court with an overview of your case. This is your opportunity to show the court what the case is about and how the trial will go down. After opening statements, you and the defendant will present your cases. You will go first by calling your witnesses to the stand and introducing evidence through their testimony and physical exhibits.
- After you rest, the defendant will present his or her case and you will have the opportunity to cross-examine their witnesses. When you cross-examine witnesses you are trying to poke holes in their story and make them come off as unreliable.
- After both parties have presented their case you will each have an opportunity to present closing arguments. Your closing argument is the last chance to talk to the court. Make sure you reiterate your case and all the strong evidence you presented.
- When the trial is complete, the fact-finder (i.e., the judge or jury) will deliberate about what they heard and make a decision. Once a decision is made, the verdict will be presented in open court. If you win, you will collect damages in an amount decided by the fact-finder.^{[17]XResearch source}
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The clerk of court can provide most of the information you need to file a lawsuit but cannot give you legal advice. If you are unsure of something and the clerk cannot answer your question, you should speak with an attorney.
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