On September 24, 2025, the Second Department issued a decision in Wymara, Ltd. v. Gansevoort Hotel Group, LLC, 2025 NY Slip Op. 05124, holding that the covenant of good faith and fair dealing could not be used to imply a contract term that parties had agreed to omit from their agreement, explaining:
Implicit in every contract is a covenant of good faith and fair dealing which encompasses any promise that a reasonable promisee would understand to be included. The implied covenant of good faith and fair dealing is a pledge that neither party to the contract shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruit of the contract, even if the terms of the contract do not explicitly prohibit such conduct. However, no obligation may be implied that would be inconsistent with other terms of the contractual relationship. A court, under the guise of interpretation, may not imply a provision the parties chose to omit.
The defendant established, prima facie, its entitlement to judgment as a matter of law dismissing the cause of action alleging breach of the implied covenant of good faith and fair dealing. Certain emails exchanged between the parties demonstrated that when the parties negotiated the license agreements, they intentionally omitted any provision related to the defendant maintaining a first-class hotel standard. A court will not imply a term where the circumstances surrounding the formation of the contract indicate that the parties, when the contract was made, must have foreseen the contingency at issue and the agreement can be enforced according to its terms.
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