In Nevada, the elements for a tort claim of breach of the covenant of good faith and fair dealing are:
- Existence of a valid contract;
- Every contract in Nevada contains an implied covenant to act in good faith in performance and enforcement of the contract;
- Justifiable expectation by the plaintiff to receive certain benefits consistent with the spirit of the agreement;
- Defendant performed in a manner that was in violation of or unfaithful to the spirit of the contract (the terms of the contract are complied with in a literal sense, but the spirit of the contract is breached);
- The existence of a special relationship of trust between the plaintiff and defendant;
- Unfaithful actions by the defendant were deliberate;
- Causation and damages; and
- Punitive Damages.
NRS 104.1203; NRS 104.1304; NRS 104.1201(t); Klein v. Freedom Strategic Partners, LLC, 595 F. Supp. 2d 1152 (D. Nev. 2009); George v. Morton, No. 2:06-CV-112-PMP-GWF, 2007 WL 680788, at *8 (D. Nev. 2007); Nelson v. Heer, 123 Nev. 217, 163 P.3d 420 (2007); Ins. Co. of the W. v. Gibson Title Co., Inc., 2006 WL 1278706 (May 11, 2006); State, University and Community College System v. Sutton, 120 Nev. 972, 989, 103 P.3d 8, 19 (Nev. 2004); Frantz v. Johnson, 116 Nev. 455, 465 n. 4, 999 P.2d 351, 358 n. 4 (2000); Great Amer. Ins. Co. v. Gen. Builders, Inc., 113 Nev. 346, 354, 934 P.2d 257 (1997); Perry v. Jordan, 111 Nev. 943, 900 P.2d 335 (1995); Hilton Hotels Corp. v. Butch Lewis Prod., Inc., 107 Nev. 226, 808 P.2d 919 (1991); A. C. Shaw Constr. v. Washoe County, 105 Nev. 913, 784 P.2d 9 (1989); Restatement (Second) of Contracts § 205 provides, “[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” K-Mart Corp. v. Ponsock, 103 Nev. 39, 48 n.8, 732 P.2d 1364, 1370 (1987) (citing Restatement (Second) of Contracts ). The breach of the covenant is sometimes referred to as a “contort” because there are two distinct causes of action recognized—one sounding in contract and the other sounding in tort. Matthew J. Barrett, Note, “Contort”: Tortious Breach of the Implied Covenant of Good Faith in Fair Dealing in Non-Insurance, Commercial Contracts – Its Existence and Desirability, 60 Notre Dame L. Rev. 510, 512 (1985); see also Gruenberg v. Aetna Ins. Co., 9 Cal.3d 566, 510 P.2d 1032, 1040, 106 Cal. Rptr. 480, 484 (1973). The Covenant of Good Faith and Fair Dealing in Nevada, 1 Nevada Law Review 68 (Spring 1998).
Hon. Jay Young (Ret.) is a retired judicial officer with decades of experience presiding over complex civil litigation matters. Following a distinguished career on the bench, Judge Young now serves as a mediator, arbitrator, and court‑appointed special master, and discovery referee. Judge Young brings a disciplined, impartial, and results‑oriented approach to dispute resolution. Judge Young is based in Nevada and accepts appointments statewide and nationally, subject to agreement or court order. He can be reached at 855.777.4557 or info@armadr.com
Known for judicial temperament, analytical rigor, and practical problem‑solving, Judge Young assists litigants and counsel in resolving high‑stakes disputes efficiently and with integrity and employing best practices. He is recognized by U.S. News and World Report’s publication Best Lawyers as Arbitration Lawyer of the Year.