Diageo Dominicana, S.R.L. v. United Brands, S.A.
A distributor won a $2.3 million jury verdict against Diageo for breach of the implied covenant of good faith and fair dealing, even though the same jury found Diageo did not breach any express term of the Resale Agreement and had properly terminated under the contract's notice provision. The Third DCA reversed, holding the implied-covenant claim could not stand where the express termination provision was followed and the contract excluded implied warranties, and separately affirmed the trial court's vacatur of a punitive damages award unaccompanied by any finding of underlying fraud liability.
Key facts
- United Brands (distributor) obtained a $2.3 million jury verdict against Diageo for breach of the implied covenant of good faith and fair dealing under a Resale Agreement, although the jury found Diageo did not breach any express contract term and properly terminated under the contract's notice provision.
- The Third District Court of Appeal reversed the implied-covenant verdict, holding that such a claim cannot survive where the defendant fully performed and terminated in accordance with express, unambiguous termination language and the contract excluded implied warranties.
- +2 more key facts with a free trial
Why it matters
This is a useful appellate authority for defendants facing implied-covenant claims that attempt to convert a lawful contractual termination into a breach. The Third DCA confirms that where a party performs and… — full analysis with a trial
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