R2d § 205

Element: every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.

Note the scope: PERFORMANCE and ENFORCEMENT. Not formation: § 205 does not police the bargain into being; it polices how parties conduct themselves once bound.

Common misunderstanding: students think § 205 creates a generalized "fairness" override. It does not. Most courts use it narrowly to prevent one party from depriving the other of the fruits of the bargain: bad-faith refusal to cooperate, opportunistic invocation of contract rights, evasive performance. It is the central lifnim mishurat hadin doctrine of modern contract law: reaching beyond strict din without rewriting the parties' deal.

Compare UCC § 1-304 (parallel rule for the UCC, plus § 1-201(b)(20) definition of good faith).