Encompassed within the implied obligation of each party to exercise good faith are any promises which a reasonable person in the position of the promisee would be justified in understanding were included. Where the contract contemplates the exercise of discretion, this pledge includes a promise not to act arbitrarily or irrationally in exercising that discretion. The duty of good faith and fair dealing, however, is not without limits, and no obligation can be implied that would be inconsistent with other terms of the contractual relationship.
Plaintiff student took the Scholastic Aptitude Test (SAT) on two occasions. Plaintiff agreed to the provisions of the registration bulletin which allowed defendant educational testing service to cancel a score where there was reason to question its validity after offering the test taker a chance to prove its validity. Plaintiff's second SAT score was 410 points higher than his first, prompting defendant to preliminarily cancel plaintiff's second score upon a finding of disparate handwriting on the two tests. Plaintiff supplied relevant information to explain the score and handwriting discrepancies. Defendant continued to question the validity of plaintiff's second score. The trial court held that defendant breached its contract with plaintiff by failing to evaluate the information plaintiff provided and ordered that his test scores be released. The appellate court affirmed this decision. The decision affirming a trial court's decision that defendant educational testing service had breached its contract with plaintiff student was affirmed in part. However, the order was modified to require defendant to make a good faith consideration of relevant rebuttal information submitted by plaintiff, rather than requiring the release of plaintiff's test score.
Did the Defendant make any effort to consider relevant information submitted by Plaintiff?
This court agreed that defendant had committed a breach but determined that the proper remedy was to require defendant to make a good faith consideration of the material submitted by plaintiff. Defendant did not consider the relevant information furnished by Plaintiff. By doing so,defendant failed to comply in good faith with its own test security procedures, thereby breaching its contract with Plaintiff.