Also known as: good will · business goodwill · going concern value
Written by attorneys · grounded in primary & secondary sources — see below
An intangible asset representing the value of a business beyond its tangible assets that arises from reputation, customer loyalty, and ongoing operations.
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Genesis Pharmaceuticals, a limited partnership, sought to sell its entire manufacturing facility and customer lists to a competitor. General partner Gareth Glover refused consent because the transaction included the firm's accumulated goodwill from long-term supplier relationships. Without unanimous approval the sale could not proceed under the partnership agreement.
Attorney Gustavo Gutierrez decided to retire and transfer his solo immigration practice to Galaxy Technologies. The purchase price expressly allocated value to the firm's goodwill based on repeat client referrals built over fifteen years. The transfer proceeded only after all clients received notice and consented to the new representation.
Gerald Gibson purchased a new vehicle from Glacier Energy's dealer and later discovered undisclosed paint defects. The jury considered the manufacturer's efforts to preserve customer goodwill when calculating punitive damages for the nondisclosure. The court reduced the award after finding the harm did not justify punishing reputation-related business decisions.
Giana Greco opened a retail store using a lamp design nearly identical to one sold by Griffin Industries. Griffin claimed the design had acquired secondary meaning through years of exclusive marketing that created consumer goodwill. The court rejected the claim because the design was functional and could not be protected as a source identifier.
Guadalupe Gallegos distributed handbills inside Lloyd Corp.'s mall criticizing the Vietnam War. Mall management argued the activity threatened the goodwill built with tenants who paid premiums for a controlled shopping environment. The Court held that the First Amendment did not require the private mall to permit the distribution.
Gregory Gates relied on Red Owl Stores' repeated assurances that financing would be available for a new grocery location. After investing in inventory and site preparation, the deal collapsed and Gates sold his existing store at a loss that included its goodwill. The court awarded reliance damages measured in part by the forgone value of that goodwill.
Goodwill is valued as the excess of the purchase price over the fair value of identifiable tangible and intangible assets. Courts and parties allocate part of the sales price to goodwill because it reflects expected future earnings from reputation and customer relationships rather than physical property.
Supporting sources
Lost goodwill may be recovered only if the evidence establishes the amount with reasonable certainty. The Restatement notes that precision is rarely possible, so courts allow recovery when a significant loss is shown and resolve doubts against the breaching party.
Supporting sources
…manufacturers with respect to the scope of protection guaranteed to the buyer, there is no incentive on their part to stimulate good will in that field of public relations. Thus, there is lacking a factor existing in more competitive fields, one which tends to guarantee the safe construction of the article sold. Since all…