This is a great opportunity to formally introduce my new Compliance Officer, Robert Almquist. Robert has been my Vice President of Legal & Marketing since the inception of Ocean Mortgage Capital. Although his responsibilities have always included compliance and industry regulations, it was fitting to also give him this official title. Some of his related words of wisdom are shared with you below.
Every enforceable contract contains “express” terms. In the case of a written contract, those are the terms that are put into words and inserted into the document.
However, it is impossible to document every detail of a complex agreement or to anticipate every possible contingency that may arise. Further, many agreements provide for some discretion on the part of the parties. (A lease agreement may provide that the tenant may sublet “with the prior consent of the landlord”, however the lease may be silent as to when the landlord may withhold that consent).
To resolve disputes over agreements that are not explicit on key contract terms, or which leave discretion to a party, courts have recognized certain “implied” terms in contracts. (With respect to the “prior consent” example above, courts will usually find it was implied that consent would not be unreasonably withheld).
The most important of implied contract terms is known as “the implied covenant of good faith and fair dealing”. Simply put, each party to a contract must act in good faith and deal with the other party fairly.
(I want to emphasize that the foregoing is not legal advice and is for informational purposes only. If you have a contract issue that you think may involve breaches of the implied covenant of good faith and fair dealing, you should consult with legal counsel in your jurisdiction.)