Also known as: good faith tests · good-faith test · good-faith tests · good faith · bona fides test
Written by attorneys · grounded in primary & secondary sources — see below
A doctrinal standard requiring a party to act honestly and without improper motive or knowledge of facts that would render the conduct wrongful when exercising a legal right or fulfilling an obligation.
Gateway Bank holds a mortgage on Gerald Gibson's home. After Gibson misses two payments, the bank accelerates the full debt and begins foreclosure. Gibson shows the bank knew of his temporary cash-flow issues and had previously accepted late payments without objection. The court refuses to enforce the acceleration because the bank failed to act in good faith.
Granite Holdings receives a deposition notice under Rule 30(b)(6) describing topics about its supply contracts. Its counsel meets with the serving party but refuses to designate any witness or discuss the scope. The court orders sanctions because the company did not confer in good faith about the matters for examination.
Select any source to read its text and confirm it supports the definition.
Shareholders sue Gulfstream Aviation's board over an insider transaction. The board appoints two independent directors who review records and interview officers before concluding the suit is not in the company's best interests. The court dismisses the action because the determination was made in good faith after a reasonable inquiry.
Gordon Gray asks his lawyer whether a proposed real-estate transfer would violate securities laws. The lawyer researches the statutes and regulations, explains the risks, and helps Gray structure the deal to comply with available exemptions. The lawyer's conduct satisfies the good-faith-effort standard even though the transaction later faces regulatory scrutiny.
A newspaper reporter receives a grand-jury subpoena seeking the identity of a confidential source in a public-corruption story. The reporter appears and testifies after the prosecutor shows the investigation is a good-faith effort to obtain evidence of crime. The First Amendment claim is rejected.
Great Lakes Steel defaults on its home mortgage. The servicer sends required notices, offers a workout, and proceeds with foreclosure only after the borrower stops communicating. Because the servicer complied with the act's requirements and acted in good faith throughout, the foreclosure sale is upheld.
The test generally demands both subjective honesty and conduct that meets reasonable commercial standards of fair dealing. Courts examine whether the party knew or should have known facts that would make the action improper.
A court may dismiss if a qualified group makes the determination in good faith after a reasonable inquiry showing that continued litigation is not in the corporation's best interests. The plaintiff must then plead particularized facts showing the determination failed those standards.
The rule requires the serving party and the organization to confer in good faith about the matters for examination before or promptly after the notice is served. Failure to do so can result in sanctions or an order compelling designation of witnesses.
A lawyer may discuss legal consequences and assist a client to make a good faith effort to determine the validity or application of the law. The lawyer may not counsel or assist the client to engage in conduct the lawyer knows is criminal or fraudulent.
…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…