A breach of the duty of good faith and fair dealing is referred to as?

• A. Malice
• B. Injurious falsehood
• C. Publication
• D. Bad faith

Answer: (D)

The main concept is the breach of the duty of good faith and fair dealing, which is the implied promise in contracts to act honestly and fairly toward the other party. In insurance, the insurer owes this duty to the insured when handling claims. A breach occurs when the insurer acts unreasonably or without a legitimate basis—denying a valid claim, delaying payment, or misinterpreting policy provisions, for example. This improper conduct is described as bad faith.

The other terms don’t fit because malice refers to ill will or intent to harm, which isn’t required to prove a bad-faith breach in contract; injurious falsehood involves making a harmful false statement; publication involves spreading statements to others. None of these capture the specific contractual breach of fair dealing that “bad faith” denotes.