Definition
Good faith is an honest state of mind and intention in the performance of a legal act or transaction. It requires the absence of any intent to seek an unconscionable advantage, together with the absence of knowledge of facts that would make the conduct inequitable. The concept operates both as a standard of conduct and as a legal test, and it appears across virtually every field of law — contracts, property, commercial transactions, constitutional law, and tort.
Three overlapping meanings arise in legal research:
1. Subjective good faith: An actor's actual, honest belief that their conduct is lawful or fair, regardless of whether that belief is objectively reasonable. This sense governs purchaser-protection doctrines (the bona fide purchaser for value) and certain criminal defenses.
2. Objective good faith: Conduct that meets the standard a reasonable person in the same position would observe. The UCC and most modern contract law employ this standard, requiring not merely honest belief but commercially reasonable behavior.
3. Implied covenant of good faith and fair dealing: A duty implied by law into virtually every contract, requiring each party to refrain from conduct that would frustrate the other party's reasonable expectations or the spirit of the agreement. Breach of this implied covenant is the basis for most contract bad faith claims and, in insurance law, for the independent bad faith tort.
Common Language
Wiktionary: "Good, honest intentions."
Webster's 1913: Good faith as a common phrase denotes straightforward dealing, sincerity of purpose, and absence of deceit or fraud.
The gap between common and legal usage is significant. In ordinary speech, good faith describes a subjective attitude — a person either means well or does not. In law, good faith is often an objective standard with enforceable consequences. A party can act with entirely honest subjective intentions and still breach the implied covenant of good faith and fair dealing by behaving in a way that, objectively, deprives the other party of the benefit of the bargain. Researchers reading the term in older sources should not assume the subjective, colloquial sense governs; the applicable standard depends on the doctrinal context.
Common Confusion
Good faith / Bona fide: These terms are often used interchangeably, and in many contexts they are equivalent. Rapalje & Lawrence simply redirects "Good Faith" to the BONA FIDE entry. The distinction that matters in research: bona fide is more commonly used as a modifier (bona fide purchaser, bona fide holder) describing status achieved by acting in good faith. Good faith more often describes the ongoing standard of conduct required within a transaction or relationship. The two concepts share the same core — honest intention without notice of defect — but their doctrinal homes differ.
Good faith / Good faith and fair dealing: Good faith standing alone most often appears in property and commercial law contexts assessing a party's state of mind at a specific moment (e.g., at the time of purchase). The implied covenant of good faith and fair dealing is relational and continuous — it governs how parties must behave throughout the life of a contract or employment relationship. Conflating the two can distort analysis, particularly in insurance bad faith cases where the tort claim turns on the covenant, not merely on isolated intent.
Core Elements
The historical dictionaries converge on two core elements that define good faith across most legal contexts:
1. Honest intention: The party must actually intend to act fairly and without taking unconscionable advantage, whether through direct means or through exploitation of legal technicalities.
2. Absence of disqualifying knowledge: The party must lack information or belief that the transaction or conduct would be inequitable. Notice of a defect, fraud, or adverse claim defeats good faith even if subjective intent remains honest.
Modern commercial law (particularly under the UCC) adds a third element in certain contexts:
3. Observance of reasonable commercial standards: For merchants, good faith requires not only honest intent and absence of bad knowledge, but conduct consistent with fair dealing in the relevant trade.
Recognized Forms
/SUBTYPES
Good faith purchaser (bona fide purchaser for value): A buyer who acquires property for value, without notice of any defect in the seller's title or of any adverse claim. This status confers protection against prior unrecorded interests and third-party claims.
Good faith and fair dealing (implied covenant): The contractual duty, implied by law, to perform and enforce agreements in a manner consistent with the reasonable expectations of both parties and the spirit of the contract.
Good faith in insurance (bad faith tort): In most jurisdictions, an insurer's failure to handle a claim in good faith — unreasonably denying or delaying payment — gives rise to an independent tort cause of action beyond ordinary breach of contract.
Good faith exception (criminal/constitutional law): A doctrine permitting use of evidence obtained in violation of constitutional search and seizure requirements when the officers relied in objective good faith on a warrant or legal authority later found defective.
Why It Matters in Research
Good faith is one of the most contextually variable terms in the legal corpus. The same two words carry a subjective test in property law, an objective-plus-commercial-reasonableness test in UCC transactions, a relational covenant in contract law, and a constitutional safe harbor in criminal procedure. Researchers applying a definition from one doctrinal area to another risk serious analytical error.
Temporal traps are significant. Historical sources — including all three dictionaries here — define good faith almost exclusively in its subjective, transactional sense: honest intention plus absence of notice. The modern implied covenant of good faith and fair dealing, which generates most contemporary good faith litigation in contracts and employment, is largely absent from nineteenth-century sources. A researcher finding "good faith" in an older treatise or case should not assume the implied covenant concept is in play; that doctrine developed substantially through twentieth-century judicial elaboration.
Jurisdictional variation in the implied covenant is sharp enough to affect research strategy materially. Some jurisdictions (notably California) recognize broad implied covenant claims that function almost as independent tort claims in employment and insurance; others cabin the covenant tightly within contract damages.
The corpus connections across the three encyclopedia entries above are not merely analogous — they are structurally linked. The implied covenant in contracts, the duty in employment, and the insurance bad faith tort all derive from the same foundational principle but have developed distinct bodies of law with different elements, remedies, and procedural postures. Researchers should treat them as related but separate doctrinal tracks.
Historical Dictionary Support
Black's Law Dictionary and Bouvier's Law Dictionary are in near-verbatim agreement, both drawing from the Dakota Territory Civil Code: good faith requires honest intention to abstain from taking unconscionable advantage and absence of knowledge of facts that would make the transaction unconscionable. This formulation is essentially the subjective-plus-notice test that persists in property law today.
Rapalje & Lawrence takes a different approach, redirecting to BONA FIDE without offering an independent definition, and listing case citations organized by context (quiet title actions, what constitutes taking in good faith). This is useful for historical case research but offers less doctrinal synthesis than the other two dictionaries.
None of the three historical dictionaries addresses the implied covenant of good faith and fair dealing as a continuous contractual duty — a significant gap for researchers working with post-mid-twentieth-century contract or employment disputes. The historical sources are reliable for the transactional, property-oriented meaning; they are silent on the relational, ongoing-duty meaning that now dominates much of the good faith litigation landscape.
Jurisdictional Note
The implied covenant of good faith and fair dealing exists in all U.S. jurisdictions but with dramatically different scope. In insurance law, nearly all states recognize some form of bad faith liability, but the elements and available damages vary widely. In employment, most states limit the implied covenant to preventing termination specifically designed to deprive an employee of already-earned benefits, while California has at times extended it more broadly. Researchers should not assume a rule from one state's good faith jurisprudence translates to another.
Encyclopedia Cross-Reference
Interpretation — Good Faith and Fair Dealing (Implied Covenant) (The Law Mind Contracts & Commercial Law Encyclopedia)
The Duty of Good Faith and Fair Dealing in Employment (The Law Mind Employment & Labor Law Encyclopedia)
Good Faith and Fair Dealing — Insurance Bad Faith Tort (The Law Mind Torts & Personal Injury Encyclopedia)