Also known as: good faith doctrine · good faith · bona fides
Written by attorneys · grounded in primary & secondary sources — see below
A principle requiring parties to legal relationships and proceedings to act honestly and fairly without deception or unfair advantage. It supplies an implied standard that limits opportunistic conduct and supports enforcement of duties in contracts, corporate governance, procedure, and foreclosure.
Darius Dixon missed two mortgage payments on his home. The lender declared the full balance due and scheduled foreclosure. Dixon showed the lender had accepted late payments for months without objection. The court refused to enforce acceleration because the lender failed to act honestly when suddenly changing course.
Destiny Davis noticed a deposition for Decker Electronics and listed five topics. The company designated an officer but refused to meet about the scope. Davis moved to compel after the officer could not answer several listed matters. The court ordered a renewed conference because the parties had not conferred honestly about the examination topics.
Select any source to read its text and confirm it supports the definition.
Dominic Drake filed a derivative action against Dawson Steel directors for self-dealing. The board formed a committee of two independent directors that reviewed records and interviewed witnesses. The committee concluded the suit would harm the company. The court dismissed the action because the committee reached its conclusion after a reasonable inquiry conducted honestly.
Doris Duffy asked her lawyer whether a proposed offshore structure would avoid reporting requirements. The lawyer researched the statute and advised that the structure likely required disclosure. Duffy proceeded anyway after the lawyer explained the risks and possible penalties. The lawyer avoided discipline because the advice constituted an honest effort to determine the law's meaning.
Daphne Doyle received a grand jury subpoena seeking her notes on a public official. She refused to identify her source and claimed a First Amendment privilege. The court ordered her to testify because the investigation was conducted honestly and the reporter had no constitutional right to withhold information.
David Dawson fell behind on his home loan. The servicer sent a notice of default but failed to respond to his repeated requests for a payment plan. The servicer then accelerated and foreclosed. The court halted the sale because the servicer had not acted honestly throughout the foreclosure process.
No. The doctrine operates as an implied covenant that supplements existing contractual or statutory duties rather than standing alone as a separate claim. Courts apply it to prevent one party from depriving the other of the fruits of the agreement.
A board committee may obtain dismissal if it determines in good faith after reasonable inquiry that the suit is not in the corporation's best interests. The plaintiff must then plead particularized facts showing the determination lacked good faith or a reasonable basis.
Good faith is one factor courts weigh when deciding whether a breach is material. A breaching party's honest efforts and the risk of forfeiture to that party can weigh against treating the breach as material even when performance deviates from specifications.
Yes. A lawyer may counsel or assist a client to make a good faith effort to determine the validity or meaning of the law even when the client's ultimate conduct may be aggressive. The lawyer may not assist conduct the lawyer knows is criminal or fraudulent.
…arising from the reasonable expectation of the continuation of benefits attending the status of marriage entered into in good faith are not present in such a case." (P. 685.) In the absence of express contract, Vallera concluded, the woman is entitled to share in property jointly accumulated only "in the proportion…