There is no single definition of good faith but it generally means honesty and without fraudulent intention. For example, under state laws, parties to a contract are expected to treat each other in good faith regardless of whether the contract specifies a duty of good faith. That is, one party cannot deceive another party or engage in activity that would undercut the purpose of the transaction. Similarly, statutes typically require the managers of an LLC to act in good faith in their dealings on behalf of the company,
« Back to Glossary Index
