Dick Broadcasting Company, Inc. of Tennessee v. Oak Ridge FM, Inc.
Supreme Court of Tennessee
395 S.W.3d 653 (2013)
DBC's (plaintiff's) contract with Oak Ridge FM (defendant) required Oak Ridge's written consent before DBC could assign its rights to a third party, but the contract never specified any standard governing when Oak Ridge could withhold that consent; when DBC sought to assign its rights as part of a $300 million sale to Citadel, Oak Ridge refused consent, and DBC sued claiming the refusal breached the implied covenant of good faith and fair dealing by failing to act reasonably.
Whether, if a contract does not provide a standard for withholding consent to an assignment of the contract, the implied covenant of good faith and fair dealing requires the party to act in a commercially reasonable manner.