Goldberg 168-05 Corp. v. Levy

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Goldberg 168-05 Corp. v. Levy
Court Supreme Court of New York, Queens County
Citation 170 Misc. 292
9 N.Y.S.2d 304
Date decided 1938


Facts:

Plaintiff sued the defendant for alleged violation of good faith concerning their lease agreement. Defendant promised to pay plaintiff $13,800 per year plus the difference between that and 10% of his gross sales receipts for the men’s clothing store. Defendant purposefully directed business to his other stores to cause a reduction below the amount of $101,000 per year, so that he could cancel his agreement, as was stated in the lease.

Procedural History:

Defendant filed a motion to dismiss the complaint for failure to state facts sufficient to constitute a cause of action.


Issues:

Whether a promise to pay rental based on gross receipts is an implied promise to bring these profits into existence, and whether purposefully avoiding this profits violates good faith.


Holding:

Judgment for plaintiff.

Reasoning:

Conduct by the defendant was in direct violation of the covenant of good faith and fair dealing which exists in every contract, and the promise was to use reasonable efforts to bring profits into existence.