LawMeaning

Good Faith

Also known as: Honesty in Fact

In one sentence

An obligation to act honestly and fairly in performing or enforcing a contract.

Plain English

Good faith means you must deal honestly and fairly with the other party. You cannot trick them, hide information, or act in a way designed to deprive them of the benefit of the deal. Good faith is often implied in contracts even if not written down. If someone acts in bad faith—say, by deliberately sabotaging performance—they can be sued for breach.

Ad slot

Example

A landlord agrees to rent an apartment but then deliberately fails to provide heat in winter, knowing the tenant needs it. This is bad faith because the landlord is not dealing fairly and is undermining the tenant's right to a habitable home.

Used in a sentence

“Both parties must perform their obligations in good faith and not act to frustrate the other's rights.”

Related terms

Implied Covenant of Good Faith and Fair Dealing
An unwritten promise in every contract that parties will act honestly and fairly toward each other.
Fair Dealing
The requirement to act reasonably and honestly in commercial dealings and contract performance.
Material Breach
A significant failure to perform a contract obligation that defeats its core purpose.
Meeting of the Minds
Both parties share the same understanding of a contract's essential terms.
Entire Agreement
A clause stating that the written contract contains the complete and final agreement between the parties.
Offer
A proposal to enter into a binding agreement on specific terms.
Acceptance
Agreeing to the exact terms of an offer, creating a binding contract.
Consideration
Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.