Diageo Dominicana, S.R.L. v. United Brands, S.A.
After a twelve-day trial, a jury found Diageo did not breach the express terms of its Resale Agreement with its Dominican distributor but did breach the implied covenant of good faith and fair dealing, awarding $2.3 million. The Third DCA reversed, holding that where the contract contained unambiguous termination and implied-warranty-exclusion provisions and the terminating party complied with them, no implied covenant claim lies. The court also affirmed denial of a new trial on fraud/punitive damages, holding the punitive award could not stand absent a finding of underlying fraud liability.
Key facts
- Diageo Dominicana, a Dominican distributor, and Diageo, its supplier, had a Resale Agreement that included an express termination-on-notice provision and excluded implied warranties and conditions.
- After a twelve-day trial, the jury found Diageo did not breach the express contract terms but found it breached the implied covenant of good faith and fair dealing, awarding $2.3 million in damages.
- +2 more key facts with a free trial
Why it matters
This is a useful appellate weapon for defendants facing implied-covenant claims used as an end-run around a lawful contractual termination: the Third DCA squarely holds that compliance with an express termination… — full analysis with a trial
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