The lease agreement provided the following term: the rent amount shall be determined in the sole and absolute discretion of the Lessor. The trial court gave the jury the following instruction: "You are not bound by the express terms of the contract but are free to go beyond the literal wordage of the written document." The trial court also instructed the jury that the jury was to decide the rental value. However, the Nevada Supreme Court found that the trial court erred in failing to find that the Lessor had sole and absolute discretion to set the rental rate. In this regard, the court stated the following: "All contracts impose upon the parties an implied covenant of good faith and fair dealing, but the implied covenant may not be used to supply additional terms to the lease…”
Virgin ValleyWater Dist. v. Paradise Canyon, LLC, 141 Nev. Adv. Op. 19 (April 25, 2025).
