The Seventh Circuit Court of Appeals held that under Illinois law a covenant of good faith and fair dealing was implied under a letter of intent1 to purchase the assets and real property of the plaintiff.   The defendants refused to allow the Phase II Environmental Site Assessment to proceed, and Trovare sued after determining that defendants had made it impossible to close.  The Seventh Circuit found that defendant’s actions causing termination of the deal created genuine issues of material fact2 that required reversal of summary judgment in favor of the defendants.3  The court’s decision in Trovare Capital Group, LLC v. Simkins Industries, Inc., --- F.3d ---, 2011 WL 2864444 (C.A. 7, July 20, 2011 (Ill.)) follows the general reasoning of the Sixth Circuit Court of Appeals in Hometown Folks, LLC, v. S & B Wilson, Inc., et al., -- F.3d --, 2011 WL 2566825 (C.A. 6, June 30, 2011 (Tenn.)).4  My July 7 article discussing Hometown Folks5 summarizes the Sixth Circuit’s analysis.  These two opinions, taken together and applying the respective laws of Tennessee and Illinois, establish that good faith must prevail when negotiating for the purchase and sale of corporate assets, even if the environmental provisions of the agreement allow for termination of the deal.