Demand notes do not fall under O.C.G.A. ยง 11-1-208 because, rather than the acceleration being dependent on whether the creditor believes in good faith that the prospect of performance is impaired, these instruments involve obligations whose very nature permits call at any time with or without reason. Fulton Nat'l Bank v. Willis Denney Ford, Inc., 154 Ga. App. 846, 269 S.E.2d 916 (1980). The only obligation of good faith that exists, then, is the general obligation of good faith that exists in every contract.
Sys., Inc., 485 So.2d 1336, 1340 (Fla. Dist. Ct. App. 1986); Fulton Nat'l Bank v. Willis Denney Ford, Inc., 154 Ga. App. 846, 848 (1980); Waller v. Maryland Nat'l Bank, 95 Md. App. 197, 216-217 (1993); Simon v. New Hampshire Sav. Bank, 112 N.H. 372, 375 (1972). Cf. Westinghouse Credit Corp. v. Hall, 144 B.R. 568, 576 (S.D. Ga. 1992).
" This means that "`what is not regulated by the contract should be done in such a way as to show good faith in the carrying out of what is expressed.' [Cit.]" Fulton Nat. Bank v. Willis Denney Ford, 154 Ga. App. 846, 848-849 ( 269 S.E.2d 916) (1980). The bank's action was covered by the contract, so OCGA ยง 11-1-203 is inapplicable.
Courts in other states that have considered this issue have held that the obligation of good faith does not apply to demand instruments. Pavco Industries, Inc v First National Bank of Mobile, 534 So.2d 572 (Ala, 1988); Taggart Taggart Seed, Inc v First Tennessee Bank National Ass'n, 684 F. Supp. 230 (ED Ark, 1988), aff'd 881 F.2d 1080 (CA 8, 1989); Centerre Bank of Kansas City, NA v Distributors, Inc, 705 S.W.2d 42 (Mo App, 1985); Fulton National Bank v Willis Denney Ford, Inc, 154 Ga. App. 846; 269 S.E.2d 916 (1980). We agree with these courts that the obligation of good faith does not apply to demand instruments.
"`A note payable on demand is due immediately after delivery without further notice or demand. . . .' (Cit.) . . . Thus, the only `duty' under the U.C.C. on a holder of a demand instrument is to seek enforcement of the instrument which is on its face `immediately' due and payable within the applicable statute of limitation." Fulton Nat. Bank v. Willis Denney Ford, 154 Ga. App. 846, 849 ( 269 S.E.2d 916) (1980). See also Stone v. First Nat. Bank of Atlanta, 159 Ga. App. 812 (2) ( 285 S.E.2d 207) (1981).
The only cases cited or located which have discussed this contention have rejected it. In Fulton National Bank v. Willis Denney Ford, Inc., 154 Ga. App. 846, 269 S.E.2d 916 (1980), a car dealer filed suit against the bank seeking damages as a result of the bank terminating its credit relation with the dealer. The bank moved for summary judgment on the ground that in terminating the credit relation it was exercising its right as the holder of demand notes to call for payment and that such action could not be a viable basis for suit against it. The dealer opposed the banks motion on the ground that there was a genuine issue of material fact as to the bank's good faith in calling the demand notes.
An accounts receivable factor is governed by its contractual agreements and, to the extent applicable, the provisions of Title 9 of the Uniform Commercial Code. C C Financial v. Ross, 250 Ga. 832, 833 (1) ( 301 S.E.2d 262) (1983). Presupposing the applicability here of OCGA ยง 11-1-203, which "`in effect states that what is not regulated by the contract should be done in such a way as to show good faith in the carrying out of what is expressed'. . . [Cit.]," Fulton Nat. Bank v. Willis Denney Ford, 154 Ga. App. 846, 848-849 ( 269 S.E.2d 916) (1980), we see no issues of bad faith to submit to a jury. The trial court erred in denying CSNB summary judgment against cross-appellees' bad faith discharge defense.
Suit may be brought on demand paper without making any independent demand.' [Cit.] `A cause of action against a maker or an acceptor accrues in the case of a demand instrument upon its date or, if no date is stated, on the date of issue.' [Cit.] Thus, the only `duty' under the U.C.C. on a holder of a demand instrument is to seek enforcement of the instrument which is on its face `immediately' due and payable within the applicable statute of limitation." Fulton Nat. Bank v. Willis Denney Ford, 154 Ga. App. 846, 849 ( 269 S.E.2d 916) (1980). 3. Stone urges that it was error to deny his motion for directed verdict and to grant that of the Bank as to one of the demand notes in the amount of $97,000.
Thus, AA sought to set the implied covenant up as an independent term in its contracts, subject to breach apart from any other. The district court rejected this attempt, and rightly so, for the "covenant" is not an independent contract term. Management Assistance, Inc. v. Computer Dimensions, Inc., 546 F. Supp. 666 (N.D. Ga. 1982), aff'd without opinion sub nom., Computer Dimensions, Inc. v. Basic Four, Inc., 747 F.2d 708 (11th Cir. 1984). It is a doctrine that modifies the meaning of all explicit terms in a contract, preventing a breach of those explicit terms de facto when performance is maintained de jure. See Smithloff v. Benson, 173 Ga. App. 870, 328 S.E.2d 759 (1985); Koets, Inc. v. Benveniste, 169 Ga. App. 352, 354, 312 S.E.2d 846 (1983) aff'd, 252 Ga. 520, 314 S.E.2d 912 (1984); Fulton Nat'l Bank v. Willis Denney Ford, Inc., 154 Ga. App. 846, 848-49, 269 S.E.2d 916 (1980); Carmichael v. Gonzalez, 107 Ga. App. 746, 131 S.E.2d 149 (1963). But it is not an undertaking that can be breached apart from those terms.
With or without reason, a demand promissory note is due immediately. Fulton Nat. Bank v. Willis Denney Ford, Inc., 154 Ga.App. 846 (1980). Under O.C.G.A. ยง 11-3-412, "the issuer, or maker, of a note . . . is obliged to pay the instrument (I) according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder."