Ram Pizza v. Super. Ct. CA4/2

DISCUSSION

With respect to petitioners’ cause of action for breach of contract, real parties

relied on the fact that petitioners never presented a formal request for approval of the

transfer of the franchises and the required information about the proposed transferee.

However, petitioners’ assertion that real parties’ representative clearly informed

petitioners that the proposed transferee would not be approved could, on a persuasive and

detailed evidentiary showing, be found to excuse petitioners’ failure to perform that

condition or obligation. (See generally Civ. Code, §§ 1440, 1515; San Bernardino Valley

Water Development Co. v. San Bernardino Valley Municipal Water Dist. (1965) 236

Cal.App.2d 238.) Hence, in our view this cause of action should have been allowed to

proceed to trial.

2 As petitioners point out in their petition for rehearing, substantially the same

analysis applies to the cause of action for breach of the implied covenant of good faith

and fair dealing, and we granted rehearing to consider that issue. Real parties in interest

argue again that conduct which is not a breach of contract cannot support a claim for

breach of the implied covenant, and…