Also known as: good faith standard · good-faith standards · good faith · good faith doctrine
Written by attorneys · grounded in primary & secondary sources — see below
A legal requirement that a party act honestly and without improper motive when exercising rights or performing obligations. The standard evaluates whether conduct reflects a genuine effort to comply with legal duties rather than an attempt to exploit technicalities or cause harm. It serves as a precondition for enforcing certain remedies or protections.
Giselle Guerrero missed two mortgage payments on her home. Grandview Holdings, the lender, declared the full balance due under the acceleration clause. The court examined whether Grandview exercised its right honestly after reviewing payment history and communications. Because Grandview acted without improper motive, acceleration was upheld and foreclosure proceeded.
Gerald Gibson served a deposition notice on Great Lakes Steel describing topics about safety records. The company and Gibson conferred about the scope before the deposition date. Great Lakes Steel designated two managers who prepared using information reasonably available to the firm. The conference satisfied the good-faith obligation and the deposition proceeded without court intervention.
Select any source to read its text and confirm it supports the definition.
Gordon Gray filed a derivative action against Gable Construction alleging self-dealing by officers. The board appointed a committee of qualified directors that reviewed documents and interviewed witnesses. The committee concluded in good faith that continuing the suit would harm the corporation. The court dismissed the action because the determination met the statutory criteria.
Gloria Green asked her lawyer whether a proposed transaction complied with new regulations. The lawyer researched the statute and analogous cases then advised Green on possible interpretations. The lawyer assisted Green in structuring the deal to test the law's limits without encouraging fraud. The good-faith effort shielded the lawyer from discipline.
Gretchen Graham received a grand jury subpoena seeking her notes on a public corruption story. She appeared and answered questions about non-confidential matters. The government conducted the investigation without targeting the press to harass sources. The First Amendment did not excuse her from testifying under these circumstances.
Guillermo Guzman defaulted on his home loan held by Gateway Bank. The bank initiated foreclosure and sent required notices while maintaining accurate records. Throughout the process the bank avoided tactics designed to mislead Guzman about cure rights. Compliance with the good-faith obligation preserved the validity of the foreclosure sale.
A party must demonstrate honest motive and reasonable steps taken to fulfill legal duties. Courts examine the surrounding circumstances including communications and documentation. The inquiry focuses on whether the conduct reflects a genuine effort rather than an attempt to exploit a technical advantage.
No. The standard requires only honest dealing and avoidance of improper motive. It does not impose a fiduciary duty to maximize the other party's benefit. A party may still pursue its own legitimate interests provided it does so without deception or bad motive.
When a court-appointed panel makes the determination, the shareholder must prove that the panel failed to act in good faith or conducted an unreasonable inquiry. The corporation does not bear the initial burden once the panel has acted. Failure to carry that burden results in dismissal.
…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…