Also known as: bona fides · bonafide · bona-fide · good faith · in good faith
Written by attorneys · grounded in primary & secondary sources — see below
An action or transaction undertaken sincerely and without fraud or deceit. The standard requires honesty in fact and observance of reasonable commercial standards of fair dealing in the circumstances.
Bruce Baldwin missed two mortgage payments on his home. Beacon Bank considered accelerating the full loan balance under the note's clause. The bank reviewed Baldwin's payment history and offered a short cure period before declaring the entire debt due. Because the bank acted sincerely and followed its usual procedures without any intent to oppress the borrower, its acceleration was valid and triggered foreclosure rights.
Boulder Construction received a deposition notice under Rule 30(b)(6) listing five specific topics about a construction contract dispute. The company promptly conferred with opposing counsel and designated two project managers who together possessed knowledge of all listed matters. The designation satisfied the rule because the company made a sincere effort to identify and prepare appropriate witnesses.
Select any source to read its text and confirm it supports the definition.
Barbara Bennett, a shareholder, filed a derivative suit alleging that Boreal Energy's board approved an improper related-party transaction. The board formed a committee of two independent directors who reviewed documents and interviewed officers over three weeks. The committee concluded in good faith that continuing the suit would harm the corporation, so the court dismissed the action on the corporation's motion.
Bradley Banks asked his lawyer whether a proposed real-estate financing structure would violate securities laws. The lawyer explained the statutory requirements and penalties but refused to draft documents that would conceal material facts from investors. The lawyer's refusal was proper because assisting known fraudulent conduct is prohibited even when the client seeks only technical advice.
A newspaper reporter received a grand jury subpoena seeking the identity of a confidential source who provided documents about public corruption. The reporter appeared and answered all questions after the prosecutor assured the investigation was conducted in good faith. The First Amendment did not shield the reporter from testifying under these circumstances.
Bharat Bhatia defaulted on a home loan. The lender began nonjudicial foreclosure but sent all required notices, allowed a cure period, and conducted the sale through a neutral trustee. Because the lender complied with every statutory step sincerely and without any attempt to mislead the borrower, the foreclosure sale was upheld against later challenge.
A subsequent purchaser must take without actual or constructive notice of a prior unrecorded interest and give valuable consideration. If the purchaser had inquiry notice of the prior claim, the purchaser is not bona fide and loses priority under notice or race-notice statutes.
No. The determination must be made by qualified directors after a reasonable inquiry whose conclusions rest on that inquiry. A plaintiff may still defeat dismissal by alleging particularized facts showing the inquiry was unreasonable or the conclusion was not reached in good faith.
A lawyer may discuss legal consequences and help the client make a good-faith effort to determine the validity, scope, or meaning of the law. The lawyer may not assist conduct the lawyer knows is criminal or fraudulent.
Some jurisdictions refuse to enforce the acceleration or require the mortgagee to reinstate the loan and allow cure. The mortgagee must exercise the right honestly and not for an improper purpose such as pressuring an unrelated negotiation.
…one was not to be found guilty of the offense "unless it is proved that the act which caused the death of the child was not done in good faith for the purpose only of preserving the life of the mother." A seemingly notable development in the English law was the case of Rex v. Bourne , [1939] 1 K. B. 687. This case apparently…