25 N.Y.2d 953 (1969)
An offeror of a prize in a contest must act in good faith and follow the stated rules of the contest; however, a claim of bad faith must be pleaded and proved by the contestant.
Summary
Murphy sued National Presto Industries alleging breach of contract related to a prize contest. The trial court ruled against Murphy, and the Appellate Division affirmed. The New York Court of Appeals affirmed, holding that while good faith is implied in all agreements, the issue of bad faith on the part of the defendant was neither pleaded nor proved by the plaintiff. The dissent argued that it was enough to allege a breach of contract and provide testimony from which an inference of bad faith could be drawn, without explicitly pleading bad faith.
Facts
Murphy participated in a prize contest offered by National Presto Industries. Murphy alleged that National Presto breached its contract by failing to properly award prizes according to the contest rules. The specific details of the contest rules and the alleged breach are not detailed in the Court of Appeals decision, but the core dispute revolves around the fairness and accuracy of the prize distribution.
Procedural History
The trial court ruled in favor of National Presto. Murphy appealed to the Appellate Division, which affirmed the trial court’s decision. Murphy then appealed to the New York Court of Appeals.
Issue(s)
Whether a contestant alleging breach of contract in a prize contest must specifically plead and prove bad faith on the part of the contest sponsor, or whether simply alleging a breach and offering evidence from which bad faith could be inferred is sufficient.
Holding
No, because the issue of bad faith, whatever its merits might have been in the abstract, was neither pleaded nor proved.
Court’s Reasoning
The Court of Appeals affirmed the lower court rulings, emphasizing that even if the defendant’s bad faith might be a valid claim in theory, the plaintiff failed to properly raise the issue in their pleadings or provide sufficient evidence to prove it at trial. The court cited several cases suggesting that bad faith must be explicitly addressed. The court implies that good faith is normally implied in contract agreements, however, in this instance the complainer needed to show bad faith on the part of the defendant, not just a breach. The dissent argued that good faith is implied in all agreements (e.g., Kirke La Shelle Co. v Armstrong Co., 263 NY 79, 87), and that if Murphy alleged a breach of contract and gave testimony from which an inference of bad faith could be drawn, that should be enough to create a jury question. The dissent believed there was no warrant for requiring bad faith to be pleaded. In summary, the Court believed that the burden of proof and pleading wasn’t met by the Plaintiff, whereas the dissent stated that the burden of proof and pleading was met and should be investigated by a jury.