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Legal Memorandum: Good Faith and Fair Dealing Covenant

Issue: What is the standard for stating a claim for breach of covenant of good faith and fair dealing in an employment matter the Virgin Islands?

Area of Law: Business Organizations & Contracts, Employee Law
Keywords: Employment contract; Covenant of good faith and fair dealing; Breach
Jurisdiction: Federal, Virgin Islands
Cited Cases: None
Cited Statutes: None
Date: 09/01/2008

Every contract imposes upon each party a duty of good faith and fair dealing in its performance.  See Ferris v. V.I. Indus. Gases, No. 1985/334 (D.V.I. Apr. 22, 1987) (employer owes to the employee a duty of good faith and fair dealing in terminating an employee). 

“[i]n the Virgin Islands, at‑will employment contracts also carry the obligations of good faith and fair dealing.”  Bostic v. AT & T of the V.I., Nos. CIVA 01-226, CIV A 99-191 (D.V.I. Apr. 16, 2003).  Accord Peterson v. First Fed. Sav. & Loan Ass’n of P.R., Inc., 617 F. Supp. 1039, 1042 (D.V.I. 1985) (concluding the plaintiff set forth a prima facie claim for breach of the implied covenant of good faith and fair dealing).

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