The Foundational Series · Part 1 of 5 · July 2026

The Covenant in Every Contract

The industry’s most effective tool for underpaying claims is already forbidden — by a promise buried in every contract ever written.

Insurance companies deny and underpay legitimate claims, and one of the key tools they use is the biased expert — the engineer, the doctor, the accountant whose paycheck depends on reaching the conclusion the insurer wants. The practice is widespread, largely hidden, and mostly unpunished. The Foundational Series is about the body of law that already prohibits it, whether or not courts have been willing to say so plainly: the duty of good faith and fair dealing.

That duty is not a statute passed to regulate insurers, and not a special rule invented for claims disputes. It is a principle of ordinary contract law — a term the law reads into every agreement, from a lease to a licensing deal to a homeowner’s policy. Understanding what it means, where it comes from, and how it behaves is what makes the case against biased experts follow as a matter of course. Five parts build that argument in order.

  • Part 1 — The covenant itself. What the law means when it says every contract carries an implied promise of good faith — what that promise protects, and against what.
  • Part 2 — What “good faith” means. The decades-long scholarly fight between Robert Summers and Steven Burton, and the practical answer courts worked out that the academy never reached.
  • Part 3 — Why insurance is different. How the same covenant that yields modest remedies in an ordinary deal becomes, in the insurance relationship, the source of a tort-backed duty.
  • Part 4 — The attendant duties. Good faith in claims handling resolves into concrete obligations — to investigate fully and fairly, to weigh the insured’s interests equally, to deal honestly — each of which, on its own terms, condemns the biased expert.
  • Part 5 — ERISA and non-ERISA. The bias problem is identical under federal benefits law; the remedy is not. Two regimes converged on the same suspicion of the financially interested decisionmaker.

Part 1, in two editions

Part 1 publishes in two companion editions on Expert Bias Report. The free edition makes the conceptual argument; the paid edition works through the case law that built the doctrine, read from the opinions themselves.

Free edition · The concept

Good Faith and Fair Dealing: The Covenant in Every Contract

Why contract law needs an implied term at all: the covenant is the law’s response to the permanent incompleteness of written agreements. It polices the exercise of discretion and fills the silences the express terms leave behind, protecting each party’s reasonable expectation of receiving the benefit of the bargain. Then it describes a contract built almost entirely of discretion and silence — an insurance policy — and shows how, there, the covenant turns from a shield that limits conduct into a sword that compels it. That transformation is where the biased expert finally enters.

Read the free edition →

Paid edition · The case law

The Covenant in Every Contract: The Case Law

The lineage, case by case, read from the opinions — and the three ways the tidy shorthand (Kirke La Shelle → Universal Sales → Comunale) misleads: it starts too late, it undercounts California’s contribution, and it miscites cases whose good-faith language actually sits in a concurrence, a dissent, or a passage the court itself called dictum. At the root sits an insurance case decided in 1914 — Brassil v. Maryland Casualty Co. — whose language about looking past “the mere surface of the contract” was quoted forward, by name, into the very decision that welded the covenant onto California insurance in 1958. The covenant did not migrate late and reluctantly into insurance; it circulated out of insurance, through the general doctrine, and home again.

Read the paid edition →

Where this fits. The Foundational Series is the ground floor beneath the Practical Tips. The Tips assume the insurer owes a duty of good faith and move straight to proving its breach through expert bias; this series establishes that the duty exists, where it comes from, and what it requires — the necessary starting point for everything the case against biased experts claims. As with the rest of this site, the ideas and the seminal authority are free; the implementing corpus — the full case-by-case lineage and the operational tools — is the paid product.

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Related

The framework the later parts build toward — the inference-of-bias standard, the four factors, and the rebuttable presumption — is laid out in Demer’s Paradigm for Assessing Biased Insurance Experts (Advocate Magazine, 2024), and operationalized across the Practical Tips.

This page summarizes Part 1 of The Foundational Series as published on Expert Bias Report. The doctrinal account — Kirke La Shelle (1933), Universal Sales (1942), Bollinger (1944), Nelson (1947), Neff (1947), Brown (1949), Comunale (1958), and Brassil (1914) — derives from the project’s primary reading of those opinions. Educational and informational only; not legal advice.