Okla. Stat. tit. 12A § 1-304

Current through Laws 2023EX1, c. 52.
Section 1-304 - Obligation of good faith - Breach

Every contract of duty within the Uniform Commercial Code imposes an obligation of good faith in its performance and enforcement. Breach of the obligation of good faith imposed by this section shall not give rise to a separate tort cause of action.

Okla. Stat. tit. 12A, § 1-304

Added by Laws 2005 , HB 2028, c. 139, § 17, eff. 1/1/2006; Amended by Laws 2009 , HB 1603, c. 228, §21, eff. 11/1/2009.

Oklahoma Code Comment

Revised § 1-304 Comment

In Beshara v. Southern National Bank, 1996 OK 90, 928 P.2d 280 (1996), the Oklahoma Supreme Court indicated that the duty to deal in good faith with reference to a contract under the UCC section 1-203 could be breached creating a separate cause of action in tort. This is contrary to basic contract law, and to a long standing Commentary (Commentary No. 10) issued by the Permanent Editorial Board for the Uniform Commercial Code, which body is charged to oversee the interpretation and administration of the UCC in the states. As Official Comment 1 to UCC section 1-304 (Obligation of Good Faith), enacted last session in Oklahoma and carrying forward former section 1- 203 without change, states:

This section does not support an independent cause of action for failure to perform or enforce in good faith. Rather, this section means that a failure to perform or enforce, in good faith a specific duty or obligation under the contract, constitutes a breach of that contract or makes unavailable, under the particular circumstances, a remedial right or power. This distinction makes it clear that the doctrine of good faith...does not create a separate duty of fairness and reasonableness which can be independently breached.

Accordingly, the Beshara case should not be followed on this point.