Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 11

Vision Corp. was a sales agent for Production Products Company. Its sales agreement provided that either party could terminate the agreement at any time at the end of a month by giving a sixty-day advance notice. Production terminated the agreement after giving proper notice. Vision, however, claimed that regardless of the wording in the contract, there was an implied obligation of good faith, and therefore, the agreement could not be canceled at will but only for good cause. Is this claim correct? (Production Products Company v. Vision Corp., 706 N.Y.S.2d 789)