Articles Tagged with Notes from the Attorney

What is good faith and fair dealing? Is this a term that is used out of habit that doesn’t carry much weight, or can and will it be enforced by the courts when violated?

According to the Louisiana Revised Statutes definitions 26:802 (6), “good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade. Another definition of good faith is “honesty”; a sincere intention to deal fairly with others. It is not just important to be fair, but the sincerity behind the intention is key. In every contract there is an implied duty of good faith and fair dealing. This means that in every contract it is suggested, but not directly expressed that the persons in the contract will deal fairly and honestly with one another. Good faith is a term that has a sincere motive without any desire to defraud others.

Fair dealing goes hand in hand with good faith when under contract. Fair dealing is not just honesty, fair dealing requires that a party cannot act contrary to the spirit of the contract even if you give the opposing party notice that you intend to do so. The term “good faith” comes from the translation of the Latin term bona fide. In the court system these two terms are used interchangeably. When the court system is determining if a party has breached a contract they have to look to see if the parties have upheld the duty of good faith and fair dealing. This means the parties must not do the following:

People who own or have owned a home, car, or business have insurance on those items. The reason people buy insurance is to ensure their assets are protected in the event of an accident or an unexpected disaster. If someone is injured in an accident, whether it is a car accident, offshore accident, a slip and fall, or even if a hurricane or tsunami comes through, chances are the damage done should be covered by an insurance policy. Why wouldn’t the claim be covered? There are many reasons a claim will get denied, often times claims are denied because of avoidable reasons such as the claim was not filed in the time limit allowed by the law. The deadline to file depends on which law is applied. The law that is applied can be determined by many different factors. The Situs rule can apply, the business contract or insurance contract can determine which law is applied. The conflict of laws analysis, which interest is stronger, can determine which law will be used.

When filing a claim for an offshore incident, where it happened is very important for what law applies and therefore what deadline will be enforced. If an explosion happens offshore, where it happened is crucial. In law, the Situs of property is where the property is located for legal purposes. This is important in determining jurisdiction and which law will be applied. If it is off the coast of Louisiana, one law will apply, if it is off a different states coast it can be an entirely different law. Even the distance off the coastline can change which law is applied and can change the deadline drastically.

When filing a claim for an automobile accident, state law will have jurisdiction, but sometimes a conflict of laws can make it unclear which state will have jurisdiction. A conflict of laws principle is a set of rules for determining which law to apply in a case over which two or more contradictory laws seem to have jurisdiction. For example, if the car accident occurs in Georgia, but the driver of vehicle one is from Texas, the at fault driver of vehicle two is from Florida, but the cause of the accident was because of a tire blowout from a defective manufacturer from Tennessee. Which state law will apply? It will be left up to the courts to determine this. The state you thought would have jurisdiction might have a two year prescription, but the state the court decides has jurisdiction may only have a one year prescription.