Insolvency

What does acting in ‘good faith’ mean?

There is no universal legal definition of acting in ‘good faith’ during business dealings, because it is a subjective behavior. However, it involves doing the following things:

  • Acting honestly
  • Acting fairly
  • Acting reasonably

Examples of not acting in good faith may include:

  • Pursuing an ulterior motive
  • Exercising power in an arbitrary way
  • Denying the other party the benefits of a contract