Also known as: good faith duty · duty of good faith · duties of good faith · good faith · implied covenant of good faith · duty of good faith and fair dealing
Written by attorneys · grounded in primary & secondary sources — see below
An obligation requiring parties in legal relationships to act honestly and fairly without intent to defraud or take unconscionable advantage. The duty is measured by whether the actor had a legitimate basis for the conduct and avoided bad-faith manipulation of rules or rights.
Select any source to read its text and confirm it supports the definition.
Gulfstream Aviation missed two mortgage installments on its hangar property. Guardian Insurance, the mortgagee, declared the full balance due and scheduled foreclosure without first providing notice or an opportunity to cure. A court later found the acceleration invalid because Guardian failed to exercise the right in good faith.
Gable Construction received a Rule 30(b)(6) notice listing eight broad topics for examination. Its counsel conferred with opposing counsel about narrowing the topics and designating appropriate officers. The parties reached an agreement on the scope before the deposition date, satisfying the good-faith conferral requirement.
Shareholders of Great Lakes Steel filed a derivative suit alleging self-dealing by two directors. The board appointed a committee of qualified directors that conducted interviews and reviewed documents before concluding that continued litigation was not in the corporation's best interests. The court dismissed the suit because the committee acted in good faith after a reasonable inquiry.
Attorney Gina Griffin advised client Glenn Gross on a proposed transaction that carried potential fraud exposure. She explained the legal risks, possible penalties, and alternative structures that would achieve the same economic result without violating the law. The advice constituted a good-faith effort to determine the validity and scope of the governing rules.
A newspaper reporter received a grand jury subpoena seeking the identity of a confidential source. The prosecutor issued the subpoena as part of a good-faith investigation into public corruption rather than to harass the press. The reporter was required to appear and testify because no constitutional privilege protected the source under these circumstances.
Guardian Insurance began nonjudicial foreclosure against homeowner Gregory Gates after he defaulted on payments. The servicer sent all required notices, offered a loss-mitigation review, and maintained accurate records throughout the process. Because the creditor acted in good faith at every stage, the foreclosure sale was upheld against later challenge.
The mortgagee must have a legitimate commercial reason for accelerating and must not accelerate solely to obtain an unfair advantage or to pressure the mortgagor into an unfavorable modification. Some jurisdictions also require prior notice and a cure period before acceleration is effective.
No. The rule requires only a good-faith effort to confer about the matters for examination. The parties need not reach agreement, but they must attempt to narrow issues and identify appropriate designees before the deposition proceeds.
…office and for the purpose of enabling such voters to cast their ballot more intelligently, and the whole thing is done in good faith and without malice, the article is privileged, although the principal matters contained in the article may be untrue in fact and derogatory to the character of the plaintiff; and in such a…
…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…
…K. B. 461). We have no thought to hold that Salmon was guilty of a conscious purpose to defraud. Very likely he assumed in all good faith that with the approaching end of the venture he might ignore his coadventurer and take the extension for himself. He had given to the enterprise time and labor as well as money. He had made…
…that, if the inevitable discovery doctrine is constitutionally permissible, it must include a threshold showing of police good faith. B The doctrine requiring courts to suppress evidence as the tainted "fruit" of unlawful governmental conduct had its genesis in Silverthorne Lumber Co. v. United States , 251 U. S.…
…of publication. See supra note 4. Each party, we think, assumes the risks of what might happen, protected only by the good faith of the other party. In other words, contract law seems here an ill fit for a promise of news source confidentiality. To impose a contract theory on this arrangement puts an unwarranted…
A court may dismiss if a majority of qualified directors, after conducting a reasonable inquiry, conclude in good faith that continued litigation is not in the corporation's best interests. The plaintiff must allege particularized facts showing the determination was not made in good faith or after reasonable inquiry.
A lawyer may not assist conduct the lawyer knows is criminal or fraudulent. The lawyer may, however, discuss legal consequences and help the client make a good-faith effort to determine the validity, scope, or application of the law.
No. Requiring a reporter to appear and testify in a good-faith grand-jury investigation does not violate the First Amendment, and no constitutional reporter's privilege exists to withhold confidential sources.
Every person governed by the act must comply with its requirements and act in good faith throughout the foreclosure process. This duty supplements the separate obligation to proceed in a commercially reasonable manner.