If either party to a franchise, dealership or other distribution agreement breaches an express contractual term, the claim for breach of contract is straightforward. Most often, the claim for breach of contract is not as clear, mainly because the agreement is not specific to the precise situation that arises during the term, or because the party drafting the agreement has purposefully left its duties unclear, giving itself wide discretion to act, or not to act.
In these situations, the vulnerable party most often turns to a common law doctrine known as the implied covenant of good faith and fair dealing, which is the law in most states including Illinois. This legal doctrine is among the most hotly disputed in franchising and Carmen D. Caruso has been a leading advocate for franchisees on good faith & fair dealing and on related concerns about “unconscionability” of over-reaching provisions in franchise agreements.
Questions of good faith and fair dealing, and questions of “substantial performance” or breach, may arise at any phase of the relationship.
Some leading examples:
Carmen D. Caruso Law Firm has advised individual unit, multi-unit and independent franchisee association clients facing all of these issues and has litigated most of them. Some case highlights: