Brian W. Erikson
Brian W. Erikson, Contracts / Agreements Lawyer - Dallas, TX
Posted over 2 years ago.

There is no implied duty of good faith in performing a contract in Texas. The Texas Supreme Court so held in English v. Fischer, 660 S.W.2d 521 (Tex. 1983), where it refused to hold that “in every contract there is an implied covenant that neither party will do anything which injures the right of the other party to receive benefits of the agreement.”

Ryan Steve Alexander
Posted over 2 years ago.

Thanks for your comment colleague, although I'm not sure you clearly understand the applicability of current case law, nor the implications of such posturing. I'm also not sure that our banter will add color or benefit a person seeking answers in this forum, but in the defense of my honor, please accept the following response:


Colleague - The covenant is back and being argued with better-than-fair success in Texas, but not in all contexts, at least not yet. English v. Fischer is a 1983 case, and has sense been eroded to the point to question its applicability in all circumstances, even those relatively similar to English’s application. See E.R. Dupuis Concrete Co. v. Penn Mutual Life Insurance Company, 137 S.W.3d 311, 1464-Eight, Ltd. v. Joppich, 154 S.W.3d 101, The Universal Life Insurance Company, AIA Services Corporation, and AIA Insurance, Inc. v. Ida M. Giles, 982 SW2d 488, Viles v Security National Insurance Co., 788 S.W.2d 566.

Seemingly, there is also a higher standard of proof, whereby bad faith is more than mere negligence or unreasonable conduct, but proof of improper motive or willful ignorance of the facts. If some one is manufacturing a breach whereby they refuse to perform their obligation which is implicit for additional obligations to become due, there is a strong presumption that an improper motive is present, someone doesn’t want to honor payment under contract when all obligations of the obligee are satisfied.

I hope this helps you in your efforts.

Brian W. Erikson
Brian W. Erikson, Contracts / Agreements Lawyer - Dallas, TX
Posted over 2 years ago.

There is no insurance involved in the questioner's situation. Texas Insurance Code article 21.21 is not at issue. Since insurance has been deemed to be a contract of adhesion, the courts and article 21.21 impose on insurance companies an obligation of good faith. But, again, insurance is not involved. I cited the English v. Fischer case to show that it is long standing Texas law. The Texas Supreme Court renewed it's holding of no general duty of contractural good faith in City of Midland v. O'Bryant, 18 S.W.3d 209, 215 (Tex. 2000). In that case, the Supreme Court stated that it has "specifically rejected the implication of a general duty of good faith and fair dealing in all contracts.". See also, Crim Truck & Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591, 595, n. 5 (Tex. 1993). Texas law is just not the same as California law. That is why I don't try to answer California questions.