                               In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 14-1437
LIFE PLANS, INCORPORATED,
                                                  Plaintiff-Appellant,

                                 v.

SECURITY LIFE OF DENVER INSURANCE COMPANY,
                                      Defendant-Appellee.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
            No. 11 C 8449 — Ronald A. Guzmán, Judge.
                     ____________________

   ARGUED DECEMBER 3, 2014 — DECIDED AUGUST 31, 2015
               ____________________

   Before MANION, ROVNER, and HAMILTON, Circuit Judges.
    HAMILTON, Circuit Judge. Plaintiff Life Plans, Inc. appeals
from the grant of summary judgment in favor of defendant
Security Life of Denver Insurance Company. In 2011, the two
companies signed an agreement under which Life Plans
would broker and Security Life would insure life insurance
policies financed through arbitrage. Roughly four months
later, Security Life said it was terminating the agreement.
Life Plans then sued Security Life for breach of contract and
2                                                   No. 14-1437

breach of the implied covenant of good faith and fair dealing
for refusing to offer the life insurance policies. The district
court granted summary judgment, reading the contract to
grant Security Life the right to terminate at any time. Life
Plans has appealed the grant of summary judgment, as well
as the district court’s denial of a motion to alter the judgment
and its earlier denial of leave to amend the complaint to add
new claims against Security Life and its parent company.
    We reverse. The evidence presents genuine disputes of
material facts for both the contract and the implied covenant
claims. The language of the agreement is ambiguous as to
whether Security Life could terminate at will during the first
three years of the agreed term. The extrinsic evidence of
meaning is in conflict, so summary judgment is not appro-
priate on this claim. We also reject Security Life’s alternative
grounds for affirmance—that a condition precedent requir-
ing Security Life’s review and approval of the product, did
not occur. The facts are disputed regarding what review was
required by the agreement and whether the required ap-
proval was received. The district court also erred in denying
Life Plans’ motion to alter the judgment, which argued that
the district court had improperly granting summary judg-
ment on a claim that had not been covered by the summary
judgment briefing.
    The implied covenant claim under Delaware law also
should not have been resolved on summary judgment. A
reasonable jury could find that Security Life’s conduct was
arbitrary and unreasonable and had the effect of denying
Life Plans the fruits of its bargain. Finally, the district court
abused its discretion in denying Life Plans’ motion for leave
to amend its complaint. Leave to amend should be given
No. 14-1437                                                  3

freely unless there is a showing of futility, undue delay, un-
due prejudice, or bad faith. None of those exceptions applied
here. Life Plans filed the motion promptly after discovering
the factual basis of its claims and acted to mitigate any delay
that might result.
I. Factual and Procedural Background
    In reviewing a grant of summary judgment, we view the
facts and draw reasonable inferences in the light most favor-
able to the non-moving party—here, Life Plans. Spitz v. Prov-
en Winners North America, LLC, 759 F.3d 724, 730 (7th Cir.
2014). The background that we recount here is not disputed.
We identify the disputed facts as they come up in our later
discussion of summary judgment.
   A. The Arbitrage Life Payment System
    Plaintiff Life Plans is a life insurance brokerage agency
owned by Pamela Simon, who is also the company’s Presi-
dent. Pamela Simon and her husband David Simon devel-
oped a new and apparently exotic method of financing life
insurance policies they call the Arbitrage Life Payment Sys-
tems, or ALPS. The details of ALPS are not important for the
issues we must decide; suffice it to say that significant
changes in market interest rates can make what once seemed
like an attractive deal for one side or the other look much
less promising. Between 1994, an affiliate of Life Plans bro-
kered ALPS-financed policies with insurers other than de-
fendant Security Life from 1994 to 2005. In 2009 and 2010,
Life Plans and Security Life discussed developing an ALPS-
financed policy product together. The policy, later named
“Peak,” would be brokered by Life Plans and insured by Se-
curity Life.
4                                                 No. 14-1437

    B. The Joint Cooperation Agreement
    On June 7, 2011, Life Plans and Security Life signed a
joint cooperation agreement regarding the sale of Peak poli-
cies. The core deal was that Security Life promised to accept
at least $100 million in premiums for Peak policies each year
for three years. Life Plans claims it would have collected ap-
proximately $21 million in commissions and fees for those
policies.
    That arrangement never came to fruition. On October 17,
2011, an attorney for Security Life wrote to Life Plans to say
that Security Life was terminating the agreement because the
Peak policy had not been approved through Security Life’s
internal review process.
    C. Procedural History
    In October 2011, Life Plans sued Security Life in state
court for breach of contract, or in the alternative, breach of
the implied covenant of good faith and fair dealing. Security
Life removed the suit to federal court based on diversity ju-
risdiction and promptly moved to dismiss the suit. The dis-
trict court denied the motion to dismiss in July 2012.
    The parties engaged in substantial discovery. After Life
Plans took the deposition of Security Life’s chief executive,
Life Plans moved to amend its complaint to add a promisso-
ry estoppel claim against Security Life and a tortious inter-
ference claim against Security Life’s parent, ING US, Inc., a
new party that had not been named in the original com-
plaint. The district court denied leave to amend the com-
plaint.
   After the close of discovery, Security Life moved for
summary judgment, arguing that the failure of a condition
No. 14-1437                                                   5

precedent discharged its obligations under the agreement.
Life Plans responded and cross-moved for summary judg-
ment on its claim that Security Life was liable for its three-
year, $300 million commitment and could not prematurely
terminate under the agreement.
    The district court granted summary judgment for Securi-
ty Life, concluding that Security Life could terminate the
agreement at any time, and entered final judgment in favor
of Security Life on all claims. Life Plans then filed a motion
to alter the judgment, arguing that it was improper to grant
summary judgment on Security Life’s liability for pending
insurance applications. Life Plans argued that, even if Securi-
ty Life’s termination was proper, it remained liable for failing
to accept applications that were submitted before the termi-
nation. The district court denied the motion to alter, finding
that Security Life had no obligation to process pending ap-
plications under the agreement and that Life Plans had for-
feited the claim by failing to present such an argument in its
own motion for summary judgment.
   This appeal followed. Life Plans appeals three orders of
the district court: the grant of summary judgment on both
counts, the denial of the motion to alter the judgment re-
garding the pending applications claim, and the denial of the
motion for leave to amend the complaint.
II. Summary Judgment
   We begin with the core of the parties’ dispute: the district
court’s grant of summary judgment to Security Life. We re-
view a grant of summary judgment de novo, viewing the evi-
dence and drawing all reasonable inferences in favor of Life
Plans, the non-moving party. Spitz, 759 F.3d at 730. Summary
6                                                   No. 14-1437

judgment is appropriate only where there is no genuine dis-
pute as to any material fact and the moving party is entitled
to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex
Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). A dispute over a
material fact is genuine if a reasonable jury could return a
verdict for the non-moving party on the evidence presented.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To
survive summary judgment, the non-moving party must
show evidence sufficient to establish every element that is
essential to its claim and for which it will bear the burden of
proof at trial. Celotex Corp., 477 U.S. at 322–23.
    A. Breach of Contract
    Life Plans claims that Security Life is liable for breaching
the joint cooperation agreement. It offers two legal theories
of breach: first, that Security Life violated the agreement by
refusing to accept premiums for Peak policies; and second,
that even if Security Life’s termination was allowed under
the agreement, it is still liable for refusing to process pend-
ing applications for Peak policies. We address both theories
in turn. Pursuant to the choice-of-law provision in the con-
tract, we apply Delaware law.
    The role of a court in interpreting a contract is to give ef-
fect to the intention of the parties as expressed in the agreed
terms. Norton v. K-Sea Transportation Partners L.P., 67 A.3d
354, 360 (Del. 2013); E.I. du Pont de Nemours & Co. v. Shell Oil
Co., 498 A.2d 1108, 1113 (Del. 1985). We enforce the plain
meaning of the words in the contract unless the parties in-
tended a special meaning. AT&T Corp. v. Lillis, 953 A.2d 241,
252 (Del. 2008). We also must “construe the agreement as a
whole, giving effect to all provisions therein.” GMG Capital
Investments, LLC v. Athenian Venture Partners I, L.P., 36 A.3d
No. 14-1437                                                    7

776, 779 (Del. 2012), quoting E.I. du Pont de Nemours & Co.,
498 A.2d at 1113. “The meaning inferred from a particular
provision cannot control the meaning of the entire agree-
ment if such an inference conflicts with the agreement’s
overall scheme or plan.” Id., citing E.I. du Pont de Nemours &
Co., 498 A.2d at 1113.
    We begin our analysis with the text of the agreement.
“Contract terms themselves will be controlling when they
establish the parties’ common meaning so that a reasonable
person in the position of either party would have no expecta-
tions inconsistent with the contract language.” Eagle Indus-
tries, Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232
(Del. 1997) (footnote and citation omitted). However, when
the text of the agreement is “fairly susceptible of different
interpretations or may have two or more different mean-
ings,” the contract is ambiguous. Id.
    Only if the contract is ambiguous may a court consider
extrinsic evidence of the parties’ intent. O’Brien v. Progressive
Northern Ins. Co., 785 A.2d 281, 288–89 (Del. 2001). “It is a
familiar rule that when a contract is ambiguous, a construc-
tion given to it by the acts and conduct of the parties with
knowledge of its terms, before any controversy has arisen as
to its meaning, is entitled to great weight, and will, when
reasonable, be adopted and enforced by the courts.” Radio
Corp. of America v. Philadelphia Storage Battery Co., 6 A.2d 329,
340 (Del. 1939); see also Viking Pump, Inc. v. Century Indemni-
ty Co., 2 A.3d 76, 101 (Del. Ch. 2009) (extrinsic evidence of
course of performance or conduct under contract shows the
parties’ intent).
8                                                 No. 14-1437

      1. The Right to Terminate
   Life Plans argues that Security Life breached the agree-
ment by terminating it, which dashed Life Plans’ hopes for
$21 million in brokerage fees over three years. Security Life
responds that the district court correctly found that it com-
mitted no breach because its termination was authorized by
the agreement. As an alternative basis for affirmance, Securi-
ty Life argues that it had no obligation to accept premiums
because of the failure of a condition precedent—the Peak
policy was not approved under Security Life’s internal re-
view process.
          a. Termination
    The district court ruled that the terms of the agreement
were unambiguous and permitted Security Life to terminate
at any time. The termination provision stated:
      Termination. This Joint Cooperation Agree-
      ment will continue indefinitely, until terminat-
      ed by either party upon thirty (30) days written
      notice, delivered by certified mail. Company
      [Security Life] will complete processing of all
      applications received prior to notice of termi-
      nation. Upon termination, all software, docu-
      ments, customer information and other docu-
      ments shared under this Joint Cooperation
      Agreement must be returned to the party
      providing same.
Joint Cooperation Agreement, § 8.i. If that were the only rel-
evant language, Security Life and the district court would
certainly be correct. But we cannot read this provision in iso-
lation from the rest of the agreement. The agreement also
No. 14-1437                                                 9

contained a provision that committed the parties to a three-
year term:
      Commitments. The terms of this Joint Coopera-
      tion Agreement will govern the commitments
      of LPI and the Company with regard to the use
      of the Policy with the A.L.P.S.TM Program. The
      Company agrees to accept at least $100,000,000
      of premium per twelve month period, exclud-
      ing reallocations and client payments, from Ju-
      ly 1, 2011 until June 30, 2014; provided howev-
      er, that the Company may in its sole discretion
      accept premium in excess of $100,000,000 in
      any such period.
Id., § 1.a. The problem is how to harmonize these two provi-
sions.
    Life Plans argues that the “commitments” provision re-
quired Security Life to accept at least $100 million in premi-
ums each year for the first three years, so that only after
three years could it terminate the arrangement by merely
giving written notice. This interpretation, Life Plans con-
tends, is consistent with the clause in the termination provi-
sion that the agreement “will continue indefinitely, until
terminated.” The agreement says “continue” because the
termination provision should govern after, but only after, the
initial three-year commitment.
    Security Life maintains that either party could terminate
at any time without penalty because the termination provi-
sion contains no limit on the timing of a termination. Ac-
cording to Security Life, the termination provision effective-
ly trumps the commitment provision, rendering the three-
10                                                            No. 14-1437

year term optional. This reading construes the “will continue
indefinitely” clause as referring to continuing from the date
the agreement was signed rather than being limited to after
the first three years.
    The agreement is ambiguous. These two provisions con-
flict with one another and do not refer to one another. They
are fairly susceptible to both interpretations. Life Plans’ read-
ing gives effect to the three-year term of commitment and
harmonizes the “will continue indefinitely” clause in the
termination provision with the commitment term. Security
Life offers a more aggressive reading of the termination pro-
vision emphasizing the absence of language limiting the par-
ties’ rights to terminate, but that reading effectively nullifies
the three-year provision. Both readings are at least plausible.
In light of this ambiguity, we consider extrinsic evidence that
might shed light on the parties’ intent.1


     1For such issues of contract interpretation, directly applicable case
law is scarce. Security Life cites Ferentinos v. Firstate Mortgage Corp., 1991
WL 18102 (Del. Super. Ct. 1991), aff’d, 608 A.2d 726 (Del. 1992), which
involved a conflict between two termination provisions in an individual
employment contract. One clause provided a five-year term unless cer-
tain reasons to terminate arose; a second clause allowed the employer to
terminate without cause “at any time” by paying the employee at least
one year’s severance pay. The trial court found the contract unambigu-
ously allowed termination at any time without cause (as long as the em-
ployer paid the severance pay), and the Delaware Supreme Court af-
firmed. Cases like these depend on close attention to the language used.
Both clauses in Ferentinos were part of a termination provision, and the
combination of termination “at any time” with severance pay seems to
have been decisive in the court’s reconciliation of the provisions. The
five-year term clause dealt with causes for termination. The severance-
pay clause allowed termination without cause, but only with severance
pay. The two clauses could therefore be reconciled as intended to com-
No. 14-1437                                                              11

    Security Life offers evidence from the parties’ negotia-
tions: a prior draft of the agreement offered by Life Plans
stating that the contract “shall not be terminable prior to the
fulfillment of COMPANY’S $300 million A.L.P.S.™ premium
commitment.” Security Life argues that the absence of that
limiting language in the final executed agreement shows that
the parties understood the agreement to allow termination at
any time. The district court was persuaded that the deletion
of this limitation showed that Security Life’s interpretation of
the termination provision was correct.
    But Life Plans argues that the language in the earlier
draft has no bearing on the parties’ intent in the final agree-
ment. Life Plans points to deposition testimony by Security
Life’s attorney who drafted the final version of the agree-
ment. That attorney said that a different document, drafted
by Security Life, was used as the basis for contract negotia-
tions. Life Plans argues that no inference can be drawn from
differences between the early Life Plans draft and the final
agreement because the Life Plans draft was never the subject
of negotiations. The clause limiting termination in the earlier
draft, which was tied to a total of $300 million in premiums
rather than to the calendar, was not specifically deleted by
the parties because it was never discussed. Life Plans also

plement one another, dealing with termination with or without cause,
and providing that the severance pay would be due only during the first
five years of the contract. In this case, however, it is much more difficult
to reconcile the two relevant provisions while giving both meaning. We
have difficulty seeing how Security Life could have made this specific
promise: “The Company agrees to accept at least $100,000,000 of premi-
um per twelve month period, excluding reallocations and client pay-
ments, from July 1, 2011 until June 30, 2014;” while also claiming a right
to terminate at any time without consequence.
12                                                 No. 14-1437

notes that Security Life offers no evidence to support an in-
ference about the parties’ intent other than the text of the
draft itself.
    The conflicting interpretations of the evidence present a
genuine dispute of material fact precluding summary judg-
ment. Where the parties offer competing reasonable infer-
ences from extrinsic evidence, the disputed meaning of the
contract is a question for the trier of fact not appropriately
resolved through summary judgment. See Mathews v. Sears
Pension Plan, 144 F.3d 461, 468 (7th Cir. 1998) (dispute over
inferences from extrinsic evidence presented question of fact
for jury on the ultimate issue of what contract meant); Re-
statement (Second) of Contracts § 212(2) (1981) (“A question
of interpretation of an integrated agreement is to be deter-
mined by the trier of fact if it depends on the credibility of
extrinsic evidence or on a choice among reasonable infer-
ences to be drawn from extrinsic evidence.”).
    Other extrinsic evidence offered by the parties also fails
to establish conclusively the parties’ intent. Life Plans offers
evidence of statements from various Security Life represent-
atives indicating that they understood termination was pro-
hibited during the first three years. David Simon’s affidavit
asserts that Security Life’s attorney said in a phone call in
June 2011 that Security Life “could not terminate the JCA
without funding the Peak Policies.” A Security Life internal
email on September 7, 2011, from a Security Life executive to
Britton and an ING U.S. executive, summarized the deal:
“Our expectation is to write $300 million of single premium
… over three years. … After 3 years, we review the product
and decide if we wish to continue to write more business.”
(E-mail from Kafayi to Carney.) And Security Life proposed
No. 14-1437                                                 13

an amendment to the agreement in July 2011 (a month after
it was signed) that would have committed Security Life to
accepting $100 million in premium for the first year but
freely allowed termination in the second and third years.
The draft amendment provided: “In the event of a Termina-
tion during [the second and third years], the Company shall
only be obligated to accept premium until the effective date
of termination of the Agreement.”
    Security Life interprets those statements more narrowly,
arguing that Life Plans is taking them out of context and
misunderstanding the speakers’ intentions and the reason
for the proposed amendment. Perhaps, but such arguments
show this is not the stuff of summary judgment. The dis-
putes over the inferences drawn from this evidence must al-
so be resolved by the trier of fact. The agreement is ambigu-
ous on this point, and the extrinsic evidence does not settle
the dispute as a matter of law.
          b. Failure of Condition Precedent
   Security Life presents an alternative ground for affirm-
ing: that it had no obligation to offer Peak policies because a
condition precedent failed. The agreement provides, in rele-
vant part:
      The obligation of the Company to offer the Pol-
      icy shall be subject to the following conditions
      …
      ii. Product Review and Approval Process. Submis-
      sion and approval of the Policy under Compa-
      ny’s Product Review and Approval Process … .
Joint Cooperation Agreement, § 2.b. The parties dispute
what the review process entailed and whether the Peak poli-
14                                                            No. 14-1437

cy received approval before Security Life terminated the
agreement.2
    Both parties argue that the condition precedent term in
the agreement is unambiguous. That’s plainly incorrect. The
“Product Review and Approval Process” is not defined in
the agreement, and the phrase does not otherwise convey an
“unmistakable meaning,” City Investing Co. Liquidating Trust
v. Continental Casualty Co., 624 A.2d 1191, 1198 (Del. 1993),
but rather is fairly susceptible to different interpretations.
The meaning of this term “can only be known through an
appreciation of the context and circumstances in which [it
was] used,” so we must consult extrinsic evidence. Id., quot-
ing Klair v. Reese, 531 A.2d 219, 223 (Del. 1987).
   Security Life argues that the “Product Review and Ap-
proval Process” refers to a risk assessment by its manage-
ment team that is informally called “PARP.” (Product Re-
view and Approval Process would seem to be abbreviated as
PRAP, but Security Life claims there is only one approval
and review process at Security Life called PARP.) According
to Security Life, there are two steps to that process: first,
Richard Lau, chief insurance risk officer for Security Life’s
parent company ING, issues a memorandum with a recom-


     2 We reject Life Plans’ argument that Security Life waived this de-
fense by failing to plead it with particularity as required by Federal Rule
of Civil Procedure 9(c). Read as a whole, the answer made clear that Se-
curity Life alleged the required approval had not been obtained. See My-
ers v. Central Florida Investments, Inc., 592 F.3d 1201, 1224 (11th Cir. 2010)
(considering pleading as a whole). Even if the answer had not been suffi-
ciently clear, the district court had discretion to allow Security Life to
raise the issue, at least where there would be no unfair prejudice to Life
Plans.
No. 14-1437                                                15

mendation regarding PARP approval of the policy, and sec-
ond, Prakash Shimpi, an executive with titles at both Securi-
ty Life and ING, makes a final decision. Security Life claims
that Life Plans understood the two-step process, as evi-
denced by notes taken by Pamela Simon on April 27, 2011
stating: “Richard ___ next week will review PARP … then
PARP goes to corporate for ok.”
    Security Life claims that the Peak policy failed to gain
approval. Lau issued a memorandum on July 22, 2011 saying
that the Peak policy “involves significant new risks” and
“cannot be recommended for sale” by his office, and that
“approval should not be given” unless three conditions were
met. Security Life contends that this memo recommended
the Peak policy not be offered. Shimpi, Lau’s superior, then
issued a memo on August 15, 2011 stating that his office ful-
ly supported the Lau recommendation expressing “concerns
of business risks associated with the single broker.” Security
Life argues that Shimpi’s signature on a pricing memoran-
dum was needed for PARP approval, and that Shimpi’s dis-
approval in that memo doomed the Peak policy and thus the
agreement with Life Plans before it ever got off the ground.
(Pricing Memorandum dated May 5, 2011 with no signa-
tures.)
   Life Plans denies that the agreement referred to that two-
step process. Life Plans counters with sworn testimony from
David Simon that representatives from Security Life told
him in December 2010 that PARP was “an individual or a
group of individuals who were deciding what the premium
needs of Security Life of Denver were.” Pam Simon testified
that those same Security Life representatives told her and
her husband David that PARP would be completed before
16                                                  No. 14-1437

the agreement was signed. (Such testimony about admis-
sions by representatives of the opposing party is not hearsay
but is admissible under Federal Rule of Evidence 801(d)(2).)
According to both Simons’ testimony, PARP was not a part of
the agreement or related to the Product Review and Ap-
proval Process mentioned as a condition precedent. Life
Plans also argues that the Product Review and Approval
Process referred to in the agreement was satisfied because a
Security Life employee admitted the Peak policy was ap-
proved by Security Life’s “contract review team” by January
12, 2011.
    In the alternative, Life Plans argues that even if the Prod-
uct Review and Approval Process mentioned in the agree-
ment was a reference to the two-step PARP, the condition
was satisfied because there is evidence that the Peak policy
actually received PARP approval, despite Security Life’s de-
nials. Life Plans contends that an earlier memo from Lau
dated June 7, 2011 approved the Peak policy. That memo
said that Security Life “would not recommend approval”
without three conditions being met, but all three were in fact
later satisfied. One executive for ING testified that he under-
stood that double negative to mean that Lau would approve
the Peak policy if the conditions were met. Life Plans also
disputes that Shimpi refused to sign the pricing memoran-
dum and therefore rejected PARP approval for the Peak poli-
cy because Shimpi said in his deposition that a different re-
view process—for minimum standards rather than the pric-
ing memorandum—was the PARP. Finally, Life Plans claims
that Security Life’s chief executive officer, Bruce Britton, gave
PARP approval to the Peak policy. Britton testified that he
signed the pricing memorandum.
No. 14-1437                                                 17

    The voluminous evidence on these matters, which we
have sharply condensed here, presents genuine disputes of
material fact that make summary judgment inappropriate.
Life Plans and Security Life presented conflicting evidence
over (a) what the Product Review and Approval Process re-
quired, (b) whether that was a reference to PARP, (c) what
PARP is, and (d) whether the Peak policy received whatever
approval was required by the agreement. It will be up to a
jury to weigh this conflicting evidence and to decide wheth-
er the condition precedent was satisfied. On this evidence, a
reasonable jury could return a verdict for either side. Neither
is entitled to summary judgment.
      2. Processing of Pending Applications
    Life Plans also challenges the district court’s grant of
summary judgment for Security Life on the second theory of
a breach of contract: even if the agreement permitted the
termination, Security Life violated the contract by failing to
process Peak applications that were already pending when it
gave notice of termination. The termination clause provided:
“Company will complete processing of all applications re-
ceived prior to notice of termination.” Security Life admits
this clause required it to process applications pending before
termination but argues that no applications for the Peak pol-
icy were pending when it gave notice of termination.
    This claim has an unusual procedural history. The par-
ties’ cross-motions for summary judgment addressed the
primary breach of contract claim regarding Security Life’s
three-year term of commitment. In response to Security
Life’s motion, Life Plans argued that the purported termina-
tion was ineffective because Security Life had not processed
pending applications. The district court rejected this argu-
18                                                             No. 14-1437

ment and commented in a footnote: “Whether or not LPI has
an independent breach of contract claim against SLD solely
for an alleged failure to complete processing of ‘all applica-
tions received prior to notice of termination’ is not discussed
by the parties.” (Emphasis added.) The district court granted
full summary judgment for Security Life and terminated the
case.
    Life Plans then moved to alter that judgment, arguing
that the parties simply had not addressed the pending appli-
cation issue in their summary judgment briefing and that
summary judgment was improper because there were dis-
puted issues of material fact. Security Life replied that Life
Plan had abandoned the pending application claim by failing
to move for summary judgment! The district court denied the
motion to alter, agreeing that Life Plans had indeed aban-
doned the claim. The district court reasoned: “It was up to
LPI to set forth any and all bases for relief it was seeking, in-
cluding the position that even if SLD properly terminated
the contract, LPI was still entitled to damages for SLD’s fail-
ure to process applications it had received at the time of ter-
mination.”
   Since the Supreme Court’s 1986 summary judgment tril-
ogy,3 the role of summary judgment in federal civil practice
has expanded significantly. Lawyers even joke that in some
types of cases, it’s malpractice for a defense attorney not to
move for summary judgment. Things have not, however,
reached the point that a party can fairly be deemed to have


     3Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574
(1986); Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Anderson v. Liberty Lob-
by, Inc., 477 U.S. 242 (1986).
No. 14-1437                                                   19

waived or forfeited a claim or defense by failing to move for
summary judgment on it. Security Life moved for judgment
on Life Plans’ breach of contract claim, arguing failure of a
condition precedent and lawful termination, but scarcely
addressed possible liability for pending applications. Life
Plans might have avoided the district court’s premature reso-
lution of this claim by stating more clearly in its briefing that
it intended to proceed with this claim even if the court
granted summary judgment for Security Life on the three-
year commitment theory. But its failure to do so did not
abandon this claim.
   Turning to the merits of the issue, there is a genuine dis-
pute of material fact as to whether any applications were
pending when Security Life gave notice. Security Life says
no because the Peak policy was never offered. Life Plans
counters that it submitted dozens of applications, at least
nine of which were approved by Security Life and for which
underwriting was completed. And Life Plans offers evidence
that Britton, Security Life’s CEO, admitted that there were
insureds who were “medically underwritten and approved,
so we should be issuing them a PEAK policy.” A reasonable
jury could find for Life Plans based on this evidence.
   B. Implied Covenant of Good Faith
   Life Plans also brought a distinct claim under Delaware
law alleging that Security Life breached the implied cove-
nant of good faith and fair dealing in abusing its discretion
to approve the Peak policy under its Product Review and
Approval Process. The district court granted summary
judgment on this claim because it found that Security Life’s
termination was an exercise of a right expressly provided in
the agreement. Having found a genuine dispute as to a ma-
20                                                No. 14-1437

terial fact regarding the termination, we re-evaluate the im-
plied covenant claim.
    Delaware recognizes a claim for the breach of the implied
covenant of good faith and fair dealing in limited circum-
stances. The implied covenant requires “‘a party in a con-
tractual relationship to refrain from arbitrary or unreason-
able conduct which has the effect of preventing the other
party to the contract from receiving the fruits’ of the bar-
gain.” Dunlap v. State Farm Fire & Casualty Ins. Co., 878 A.2d
434, 442 (Del. 2005), quoting Wilgus v. Salt Pond Investment
Co., 498 A.2d 151, 159 (Del. Ch. 1985). The covenant implies
terms in an agreement to fill gaps or to account for unantici-
pated developments. Id.
    The implied covenant cannot modify the express lan-
guage of the parties’ agreement, so a party generally may not
base a claim of a breach of the implied covenant on conduct
authorized by the terms of an agreement. Id. “Under Dela-
ware law, a court confronting an implied covenant claim
asks whether it is clear from what was expressly agreed up-
on that the parties who negotiated the express terms of the
contract would have agreed to proscribe the act later com-
plained of as a breach of the implied covenant of good
faith—had they thought to negotiate with respect to that
matter.” Gerber v. Enterprise Products Holdings, LLC, 67 A.3d
400, 418 (Del. 2013), overruled on other grounds by Winshall
v. Viacom Int'l Inc., 76 A.3d 808 (Del. 2013). Finding a breach
of the implied covenant “should be a rare and fact-intensive
exercise, governed solely by issues of compelling fairness.”
Dunlap, 878 A.2d at 442 (brackets, footnote, citation, and in-
ternal quotation marks omitted).
No. 14-1437                                                  21

    Life Plans has offered evidence to show that questions of
fact preclude summary judgment on this claim. A reasonable
jury could find that Security Life’s alleged termination was
arbitrary or unreasonable and would have been proscribed if
the parties had thought to negotiate with respect to this mat-
ter. Life Plans argues that Security Life acted in bad faith and
treated Life Plans unfairly. Even the CEO of Security Life
wrote in an internal email on September 25, 2011 to Lau and
another executive that “We are not operating with integrity
in this deal,” trying to convince them to reverse their disap-
proval of PARP. CEO Britton also discussed the possibility of
telling other insurance companies not to work with Life
Plans in the context of addressing executives’ concerns that
Life Plans would just transfer the ALPS-funded policies to
another insurance carrier. These comments could support a
reasonable finding that Security Life’s conduct breached the
implied covenant.
   Security Life argues that the evidence shows that it had a
perfectly reasonable explanation for not offering the Peak
policy: it found the exotic policy was just too risky. That may
well be true, but on this record the evidence does not sup-
port summary judgment. Security Life may address its ar-
guments about the better inferences to draw from the evi-
dence to the jury at trial. The inferences argued by Life Plans
are reasonable. That is enough to survive summary judg-
ment.
    Security Life also contends that it is entitled to summary
judgment on this claim because Life Plans has not presented
evidence that would show fraud, deceit, or misrepresenta-
tion, which Security Life contends is required under Dela-
ware Law. It cites a Court of Chancery opinion stating: “The
22                                                   No. 14-1437

Delaware Supreme Court has explicitly held that a claimant
must demonstrate that the conduct at issue involved fraud,
deceit, or misrepresentation in order to prove a breach of the
implied covenant.” Continental Ins. Co. v. Rutledge & Co., 750
A.2d 1219, 1234 (Del. Ch. 2000). But the Delaware Supreme
Court opinion that Continental Insurance cited held that an
employer breaches the implied covenant in an employment
contract only when the employer’s conduct constitutes “an
aspect of fraud, deceit or misrepresentation.” Merrill v. Cro-
thall-American, Inc., 606 A.2d 96, 101 (Del. 1992) (citation and
internal quotation marks omitted). That decision should not
be read to apply broadly to all implied covenant claims.
More recent opinions from the Delaware Supreme Court and
the Court of Chancery have addressed implied covenant
claims outside the employment context and have not re-
quired fraud as an element of the claim. See Gerber, 67 A.3d
at 418–19; Allen v. El Paso Pipeline GP Co., 113 A.3d 167, 183
(Del. Ch. 2014).
    Finally, Security Life tries to avoid its choice of Delaware
law and argues that Illinois law does not recognize an inde-
pendent claim for breach of the implied covenant of good
faith and fair dealing. See, e.g., LaScola v. US Sprint Commu-
nications, 946 F.2d 559, 565 (7th Cir. 1991) (in Illinois, obliga-
tion of good faith “is in aid of and furtherance of other terms
of the agreement of the parties” and “does not create an in-
dependent cause of action”). Though Security Life agrees
that Delaware law governs the rest of this dispute because of
the agreement’s choice-of-law provision, it challenges the
application of Delaware law to this claim. It argues that the
failure of the condition precedent means the agreement is
unenforceable so that the provision choosing Delaware law
has no effect.
No. 14-1437                                                   23

     That is an incorrect statement of the law. Even if one par-
ty to the contract alleges the failure of a condition precedent,
we apply the law chosen by the parties to all contractual is-
sues. Smurfit Newsprint Corp. v. Southeast Paper Mfg. Co., 368
F.3d 944, 949 (7th Cir. 2004). A contract’s choice-of-law provi-
sion may not apply if the contract’s legality is fairly in doubt,
for example, if the contract is unconscionable, or if there is
some other issue as to the validity of the very formation of
the contract. See Sarnoff v. American Home Products Corp., 798
F.2d 1075, 1081–82 (7th Cir. 1986), abrogated on other
grounds by Hart v. Schering-Plough Corp., 253 F.3d 272 (7th
Cir. 2001). But that concern is not present here. If Security
Life is correct that a condition precedent was not satisfied,
the agreement provides that it is relieved of the obligation to
offer the Peak policy. That does not void the agreement’s
Delaware choice-of-law provision. Under Illinois choice-of-
law rules, which we apply as a federal court sitting in diver-
sity, a court must honor a contractual choice of law unless
the parties’ choice of law would both violate fundamental
Illinois public policy and Illinois has a materially greater in-
terest in the litigation than the chosen state. Smurfit, 368 F.3d
at 949, citing English Co. v. Northwest Envirocon, Inc., 663
N.E.2d 448, 452 (Ill. App. 1996). Security Life has never ar-
gued that exception applies here and could not show it on
these facts, especially because the agreement is a commercial
contract negotiated by sophisticated business parties.
III. Denial of Leave to Amend the Complaint
    The final issue on appeal is the district court’s denial of
leave to amend the complaint. Life Plans sought to add two
new claims: a promissory estoppel claim against Security
Life and a tortious interference with contract claim against
24                                                   No. 14-1437

ING U.S., Inc., Security Life’s parent company. ING U.S. was
not sued in the original complaint, so Life Plans’ amended
complaint proposed adding ING U.S. as a new defendant.
    The district court denied Life Plans’ motion for leave to
amend because it was filed near the end of the discovery pe-
riod. We review a denial of leave to amend for abuse of dis-
cretion, but we think this is one of those unusual cases
where the denial was an abuse of discretion. See Runnion v.
Girl Scouts of Greater Chicago, 786 F.3d 510, 528 (7th Cir. 2015).
    The Federal Rules of Civil Procedure adopt a liberal
standard for amending: “The court should freely give leave
when justice so requires.” Fed. R. Civ. P. 15(a)(2). The Su-
preme Court has interpreted this rule to require a district
court to allow amendment unless there is a good reason—
futility, undue delay, undue prejudice, or bad faith—for
denying leave to amend. Foman v. Davis, 371 U.S. 178, 182
(1962).
    None of those exceptions that might justify denying
amendment was present in this case. Life Plans’ request for
amendment was timely. Life Plans sought amendment
promptly after discovering a factual basis for its new claims
and tried to mitigate any delay that could result from
amending the complaint late in discovery. Though the dis-
trict court expressed frustration because the request was
made when there was only a month remaining before the
deadline for completing discovery, the motion was filed
promptly and would not have caused undue delay. Life
Plans sought leave to amend just ten days after completing
the deposition of Security Life’s CEO, whose testimony
showed for the first time, according to Life Plans, that termi-
nation of the agreement was forced on Security Life by ING.
No. 14-1437                                                         25

Mindful of the impending discovery deadline, Life Plans
told the court that it would not ask to re-depose any wit-
nesses. And Security Life had completed only one deposition
when amendment was sought, and that witness had already
been asked about the amended complaint.
    Granting the amendment in these circumstances would
not necessarily have caused any delay, and even a modest
delay would not have been undue. See Dubicz v. Common-
wealth Edison Co., 377 F.3d 787, 793 (7th Cir. 2004) (“[D]elay
by itself is normally an insufficient reason to deny a motion
for leave to amend. Delay must be coupled with some other
reason … [t]ypically … prejudice to the non-moving party.”)
(citation omitted). The purpose of discovery is to refine the
case and to prepare it for trial based on a full understanding
of the relevant facts. If discovery shows that a party should
be added, and if the moving party has been diligent, there
may well be sound grounds for amending the pleadings and
even adding a new party. Moreover, Security Life has never
explained how it would be prejudiced by the amendment.
Concerns about delay did not justify refusing amendment.
And in light of our other rulings, we cannot say the pro-
posed amendment would have been futile.4
   The judgment of the district court is REVERSED and the
case is REMANDED for proceedings consistent with this
opinion.




   4  At oral argument, counsel for Life Plans moved for the reassign-
ment of this case on remand pursuant to Circuit Rule 36. We see no rea-
son to reassign the case and so deny the request.
26                                                   No. 14-1437

   ROVNER, Circuit Judge, concurring in part and dissenting in
part.
    In my view, the Termination provision is not ambiguous:
it granted an unfettered right to either party to terminate the
agreement on thirty days’ notice. Because of this conclusion, I
would find that it is not necessary to address the question of
whether Security Life breached the implied covenant of good
faith and fair dealing when it terminated the contract. I concur
in the majority’s opinion on the issues of the processing of
pending applications and the denial of leave to amend the
complaint. In addressing the pending applications on remand,
the district court likely will have to consider the issues of the
condition precedent and the implied covenant of good faith
and fair dealing as it relates to the failure to approve the Peak
policy. On those issues, I agree with the majority’s conclusion
that summary judgment is inappropriate and that a trial is
needed to resolve the fact questions identified in the majority
opinion. But as to the termination, I respectfully dissent.
    The “Commitments” clause of the contract provides, in
relevant part, that Security Life “agrees to accept at least
$100,000,000 of premium per twelve month period, excluding
reallocations and client payments, from July 1, 2011 until
June 30, 2014[.]” The “Termination” provision specifies that
“[t]his Joint Cooperation Agreement will continue indefinitely,
until terminated by either party upon thirty (30) days written
notice, delivered by certified mail.” The majority agrees that
the Termination provision, standing alone, granted Security
Life the right to terminate the contract at any time. Supra at 10.
But the majority reads the “Commitments” clause as a
“provision that committed the parties to a three-year term,”
and concludes that the seemingly conflicting provisions must
be harmonized. I simply do not see any language in the
No. 14-1437                                                     27
Commitments clause that binds either party to a particular
term of years. Instead, the Commitments clause locks in
financial terms that will govern the parties during the first
three years of an indefinite relationship.
     An example illustrates the distinction that I am drawing.
Suppose a renter signs a month-to-month lease with a termina-
tion provision identical to the one utilized by the parties here.
If the lease also contains a provision that states, “The rent shall
be fixed at $1200 per month for the first twelve months,” no
one would argue that the month-to-month contract has been
transformed into a one-year lease. The rent clause would be
understood to be setting the financial terms for the first twelve
months of an indefinite relationship. Likewise, using the
language of the contract at issue, if the lease provides, “The
renter agrees to pay $1200 per month for the first thirty-six
months,” it would remain a month-to-month lease, not a lease
with a three-year minimum term. The rent clause, like the
Commitments clause here, removes uncertainty about financial
expectations but says nothing about the length of the agree-
ment.
   Purely financial terms cannot set the length of an indefinite
contract. Nothing in the financial “Commitments” clause of the
contract at issue here binds either party to a relationship of a
definite term. The language simply commits Security Life to
accepting a certain amount of premium per twelve month
period for the first three years of an indefinite relationship. It
would have been very easy for the parties to draft language
committing them to an initial three year term. For example,
they could have said that “the initial term of this agreement
shall be three years, after which the agreement will continue
indefinitely until either party terminates with thirty days’
notice in writing.” But they did not draft the contract that way;
28                                                 No. 14-1437
they drafted an agreement with an indefinite term. Indeed, the
contract was subject to six express conditions precedent before
the deal would even commence. See Joint Cooperation Agree-
ment, § 2.b (listing the conditions precedent). Because there is
no conflict between the Commitments clause and the Termina-
tion provision, there is no ambiguity and no need to consider
extrinsic evidence.
    Neither party cited a case directly on point interpreting
similar language. The majority cites no controlling case and I
was also unable to find one. Security Life seems to have found
the closest analogue with the decision in Ferentinos v. Firstate
Mortgage Corp., 1991 WL 18102 (Del. Super. Ct. 1991), aff’d,
608 A.2d 726 (Del. 1992). In that case, a contract provision
established a five-year term of employment unless the em-
ployee died, became disabled, or was terminated for cause.
Another clause stated that the employer “may elect to termi-
nate this agreement without cause at any time” by paying the
smaller of one years’ salary or the balance due on the unex-
pired term of employment. The court found no ambiguity in
those provisions, even though one stated a fixed term for the
contract and the other purported to allow termination at any
time.
    The case is even stronger here, where there is no provision
setting a particular length of time for the contract, and where
the only duration-related provision states that the agreement
is indefinite. As is apparent from the briefs, the agreement
never really got off the ground and at best there may be some
partial performance issues to be resolved. Because the contract
granted either party an unlimited right to terminate the
agreement on thirty days’ notice, I would affirm the district
court’s grant of summary judgment in favor of Security Life on
the issue of termination. I agree that the case must be re-
No. 14-1437                                               29
manded, however, because there are open questions of fact
regarding pending applications and because the district court
should have allowed Life Plans to amend its complaint. In my
view, the only issues for trial relate to partial performance
during the four months that the agreement was in effect.
