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Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Center Associates

    Brief Fact Summary.

    The plaintiff operated a tennis club on property leased from the defendant. The lease agreement contained had an option to purchase or lease for 99 years. To avail the option, a 6-month notice and $150,000 payment was required. The plaintiff gave notice to the defendant, however, didn’t pay $150,000.

    Synopsis of Rule of Law.

    In New Jersey, a commercial landlord breaches the implied covenant of good faith and fair dealing when it engages in a pattern of evasion and non-responsiveness which precludes the advantage from claiming a deal initially proposed by the contracting parties.

    Facts.

    Brunswick Hills Racquet Club, Inc. (Brunswick Hills) (plaintiff) operated a tennis club on property leased from Route 18 Shopping Center Associates (Route 18) (defendant).  The rent understanding contained an alternative permitting Brunswick Hills to either buy the property or to go into a 99-year lease agreement. If it practiced the alternative, Brunswick Hills was required to pay $150,000 and to tell Route 18 six months before the close of the first rent term. Brunswick Hills more than once over a two-year time span gave composed and verbal notice to Route 18 of its aim to go into the 99-year rent, yet never offered the $150,000. Long after the alternative had lapsed, Route 18's lawyer rejected Brunswick Hill's offer. Brunswick Hills recorded suit against Route 18 seeking damages and to compel specific performance of the option.  After a bench trial, the court held for Route 18, taking note of that the agreement unmistakably required Brunswick Hills to practice the choice and to pay the $150,000 in a timely manner. Brunswick Hills appealed. The appellate court affirmed, taking note of that Brunswick Hills neglected to act in "strict accordance" with the agreement terms administering the alternative. The Supreme Court of New Jersey granted certiorari to review.

    Issue.

    In New Jersey, does a commercial landlord breach the implied covenant of good faith and fair dealing when it engages in a pattern of evasion and non-responsiveness which precludes the advantage from claiming a deal initially proposed by the contracting parties?

    Held.

    Yes. In New Jersey, an agreement of good faith and fair dealing is suggested in each agreement and requires the parties to forgo doing anything which would pulverize or harm the privilege of the other party to get benefits under the terms of the agreement.

    Dissent.

    N/A

    Concurrence.

    N/A

    Discussion.

    A breach of good faith and fair dealing must show proof of bad motive by defendant that he/she engaged in some conduct that precluded the advantage from securing the deal initially proposed by the parties.t. In this case, the defendant breached the covenant of good faith and fair dealing. Over a two-year time, the defendant sidestepped every opportunity to respond to plaintiff’s intention to enter a 99 years’ lease on the property. The defendant argues that the plaintiff failed to pay $150000 as required. The evidence produced at the court showed that the money wasn’t due until both parties reach an agreement and signed the deal. The judgement of the appellate division is reversed and the matter is remanded to the trial court for further proceedings.


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