Druker v. Roland Wm. Jutras Associates

Supreme Judicial Court of Massachusetts · 1976 · Corporations

348 N.E.2d 763 (1976)

Updated August 22, 2026

CorporationsContractsPleadingRule 12(b)(6)implied covenantgood faith and fair dealingnotice pleadingbreach of contract

Facts

The plaintiff alleged that he developed a distinctive restaurant concept for "Zachary's," including its name, logotype, legend, design format, and theme, through personal effort, ingenuity, and expense. In March 1970, he entered into a written agreement with the defendant corporation to perform decorating and consulting services for the hotel and restaurant, and the individual defendant was the corporation's president and chief executive officer. The defendants allegedly became privy to the plaintiff's concept through that relationship and later, without his consent, revealed and recommended the same concept, name, and related design elements for a hotel restaurant in Toronto. The Toronto hotel then opened using the name "Zachary's" and the plaintiff's logotype, legend, designs, and themes, allegedly damaging the plaintiff and enriching the defendants.

Issue

Whether the complaint, construed under liberal notice-pleading standards, sufficiently stated a claim for relief against the defendants. More specifically, the question was whether the allegations were enough to state a claim for breach of contract based on the implied covenant of good faith and fair dealing.

Rule

In every contract there is an implied covenant that neither party shall do anything that will destroy or injure the right of the other party to receive the fruits of the contract; thus every contract includes an implied covenant of good faith and fair dealing. Under Mass. R. Civ. P. 8, pleadings are construed with intendments in favor of the pleader, and legal conclusions are acceptable if the defendant is fairly notified of the nature and grounds of the claim.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Seattle, Maya Chen hired Alder Row Studio, Inc. under a written contract to design and advise on a themed bakery she had created, including its name, visual style, and customer experience. Maya later sued, alleging the studio learned the concept through the contract and then used the same concept for a different client in Portland for its own profit, without her consent.

Alder Row Studio moves to dismiss for failure to state a claim, arguing the complaint does not identify an express contractual term forbidding reuse of the concept. How should the court rule?

Explanation. The majority held that every contract includes an implied covenant that neither party will do anything that destroys or injures the other party's right to receive the fruits of the contract. Under liberal notice pleading, allegations of a contract, access to the plaintiff's concept through that contract, and later use for the defendant's own profit are enough to state a contract claim even without pleading an express no-reuse term.