In Sons of Thunder v. Borden, Inc., 121 N.J. 520, 690 A.2d 575 (1997), the New Jersey Supreme Court upheld a verdict and damage award for breach of specific contract provisions, and a separate verdict and damage award under the same contract for breach of the implied duty of good faith and fair dealing.
BLF’s client, a fishing company whose business included catching shellfish for sale to food processors and distributors, brought claims against a processing and distributing company for breach of contract and breach of the covenant of good faith and fair dealing, which was an implicit part of that contract. The jury found for the client on the good faith and fair dealing claim, but against it on breach of contract claim. The Appellate Division reversed, holding that if there was no breach of contract, there could be no breach of the covenant of good faith and fair dealing.
The New Jersey Supreme Court disagreed and reinstated the jury verdict. It held that a party who violated the spirit of the contract, while adhering to its letter, could be held liable for breach of the implied covenant of good faith and fair dealing, even if it did not breach the express terms of the contract.