WPI 302.11 Implied Duty of Good Faith and Fair Dealing

Use this instruction whenever the jury requires an explanation of the duty of good faith.

If it is not clear from the statement of claims instruction, an additional paragraph should be added to inform the jury of the consequence of their finding that a party breached its duty of good faith. See, e.g., the second paragraph of the instruction in WPI 302.08 (Excuse of Performance—Interference With Contractual Performance).

The “implied duty of good faith and fair dealing” in every contract “obligates the parties to cooperate with each other so that each may obtain the full benefit of performance.” Badgett v. Sec. State Bank, 116 Wn.2d 563, 569, 807 P.2d 356 (1991). This obligation, while prohibiting one party from interfering with the other's performance, does not require a party to “affirmatively assist” the other's performance. State v. Trask, 91 Wn.App. 253, 272–73, 957 P.2d 781 (1998).

Further, the duty of good faith neither obligates a party to accept a material change in the terms of its contract, Betchard-Clayton, Inc. v. King, 41 Wn.App. 887, 890, 707 P.2d 1361 (1985), nor does it “inject substantive terms into the parties' contract.” Rather, it requires only that the parties perform in good faith the obligations imposed by their agreement. Barrett v. Weyerhaeuser Co. Severance Pay Plan, 40 Wn.App. 630, 635 n. 6, 700 P.2d 338 (1985). Thus, the duty arises only in connection with terms agreed to by the parties. See Badgett, 116 Wn.2d at 569; Lonsdale v. Chesterfield, 99 Wn.2d 353, 662 P.2d 385 (1983); Miller v. Othello Packers, Inc., 67 Wn.2d 842, 843–44, 410 P.2d 33 (1966); Matson v. Emory, 36 Wn.App. 681, 676 P.2d 1029 (1984); CHG Int'l., Inc. v. Robin Lee Inc., 35 Wn.App. 512, 667 P.2d 1127 (1983).

There is no “free-floating” duty of good faith and fair dealing, unattached to an existing contract; rather, it exists only in relation to performance of a specific contract term. Keystone Land & Dev. Co. v. Xerox Corp., 152 Wn.2d 171, 177, 94 P.3d 945 (2004); see also Donald B. Murphy Contractors, Inc. v. King Cnty., 112 Wn.App. 192, 197, 49 P.3d 912 (2002) (“If no [specific] contractual duty exists, there is nothing that must be performed in good faith.”); Goodyear Tire & Rubber Co. v. Whiteman Tire, Inc., 86 Wn.App. 732, 738–40, 935 P.2d 628 (1997).

Washington courts generally do not imply a duty of good faith and fair dealing in at-will employment contracts. Trimble v. Wash. State Univ., 140 Wn.2d 88, 96–97, 993 P.2d 259 (2000); Willis v. Champlain Cable Corp., 109 Wn.2d 747, 748 P.2d 621 (1988). Nevertheless, “under some egregious circumstances an implied covenant of good faith may be appropriate” for these contracts. Trimble, 140 Wn.2d at 97.

For further discussion of the issues underlying this instruction, see DeWolf, Allen, & Caruso, 25 Washington Practice, Contract Law and Practice § 5:13 (3d ed.).