Also known as: good-faith belief · good faith beliefs · good-faith beliefs · good faith
Written by attorneys · grounded in primary & secondary sources — see below
A sincere and honest mental state held without knowledge of facts indicating wrongdoing or without improper motive. The standard requires an absence of bad faith or reckless disregard of contrary information. It functions as a prerequisite or defense in contexts ranging from contract performance to procedural compliance and property claims.
Guillermo Guzman missed two mortgage payments on his home. The lender, Gateway Bank, reviewed his payment history and determined that acceleration was necessary to protect its security interest. Because the bank acted on accurate records without any intent to harass Guzman, the acceleration satisfied the good faith belief requirement and permitted foreclosure proceedings.
Global Dynamics received a Rule 30(b)(6) notice listing ten deposition topics. Its counsel contacted opposing counsel and exchanged proposed dates and document lists. The parties reached an agreement on the scope of testimony because each side approached the conference with accurate information and without any intent to obstruct discovery.
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Shareholders of Griffin Industries filed a derivative suit alleging self-dealing by two directors. The board appointed a committee of three qualified directors who reviewed documents and interviewed witnesses. The committee concluded in good faith that continuing the suit would harm the corporation, leading the court to dismiss the action under the statute.
Grace Gupta asked her lawyer whether a proposed real estate transaction might violate zoning rules. The lawyer researched the ordinance and advised Gupta on possible interpretations without encouraging any unlawful conduct. Because the lawyer's advice rested on a sincere effort to clarify the law, the consultation complied with professional conduct standards.
A newspaper reporter received a grand jury subpoena seeking the identity of a confidential source. The prosecutor assured the court that the investigation was legitimate and not aimed at punishing the press. The reporter appeared and answered questions because the government's request reflected a good faith belief in the need for the testimony.
Greenleaf Farms defaulted on its farm loan. The lender sent required notices and offered a cure period before scheduling a foreclosure sale. Throughout the process the lender maintained accurate records and avoided any deceptive tactics, satisfying the statutory obligation to proceed in good faith.
A good faith belief requires an honest mental state without knowledge of contrary facts or improper motive. Negligence involves failure to exercise reasonable care even if the actor subjectively believes the conduct is proper. Primary authorities require the absence of bad faith or reckless disregard rather than simple carelessness.
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Yes. The standard focuses on the party's state of mind at the time of the action, not on later-discovered truth. Courts and statutes protect parties who act on an honest belief formed after reasonable inquiry even if the belief turns out to be mistaken.
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A board committee must conduct a reasonable inquiry and reach its conclusion without conflicts or improper purpose. The statute permits dismissal only when the determination satisfies both the good faith and reasonable inquiry elements. General allegations of bias are insufficient to overcome a properly supported motion.
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A lawyer may discuss legal consequences and assist a client in making a good faith effort to determine the validity or meaning of the law. The lawyer may not, however, counsel or assist conduct the lawyer knows is criminal or fraudulent.
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…98 F. Supp. 797, 798. In the South Carolina case, the court below found that the defendants were proceeding "promptly and in good faith to comply with the court's decree." 103 F. Supp. 920, 921. In the Virginia case, the court below noted that the equalization program was already "afoot and progressing" (103 F. Supp. 337,…