Good Faith

When someone is acting in “good faith,” it means that he is acting with honest intent, and is expected to be honest and to keep his promises without taking advantage of someone else. It is also expected that he will not hold the other party to an impossible standard. Good faith is a necessary element in a variety of situations, ranging from contracts and settlement negotiations, to personal injury and tort cases. To explore this concept, consider the following good faith definition.

Definition of Good Faith

Noun

  1. Sincere conduct free from malice or a desire to defraud others.

Origin

1890-1895

Covenant of Good Faith and Fair Dealing

The covenant of good faith and fair dealing is a presumption that the parties to a situation will be honest and fair in their dealings, so as not to take advantage of the other parties, or to otherwise infringe upon their rights. A corporation’s officers and directors are bound by their fiduciary duties to act in good faith. This is because they are the face of their organization, and so the way they behave is a reflection on the company they work for.

The covenant of good faith and fair dealing may be defined differently, depending on the situation at hand. However, most courts tend to focus on two ethics when determining whether someone acted in good faith. The first of these is reasonableness. Someone can be liable for dealing in bad faith if he does not uphold his end of the bargain, and he has no valid reason for not doing so. This is also true if his reason has absolutely nothing to do with the situation at hand.

Example of good faith dispute:

Carl is injured in a car accident. He files a claim with his insurance company, which is supposed to pay for his medical bills and car repairs. His insurance company, however, never pays Carl’s bills, and when he calls to find out why, he cannot reach a real person. He leaves a message and no one ever calls him back. This is a situation wherein the insurance company can be held liable by the court for failing to act in good faith. Not only did the company not pay Carl’s medical bills as agreed, but they also refuse to give him a reason why.

The company could say they are having phone difficulties that have prohibited them from calling Carl back, but this is where reasonableness comes in. The company must prove that they acted within a reasonable amount of time on all fronts. If they knew their phones were down, for instance, then they should have had them fixed later that day. There is no reasonable excuse as to why Carl did not receive a call back for weeks, despite leaving the company multiple messages.

The second ethic that is measured when determining whether a covenant of good faith and fair dealing exists is the person’s intent, in addition to his reasonableness. Under this second standard, a defendant may be liable for acting in bad faith if he was unreasonable and knew, or should have known, there was no reason for him to act the way he did. For instance, in the insurance example of good faith above, the company would be held liable for acting in bad faith if it was aware that there was no legitimate reason for them to refuse to pay Carl’s medical bills but refused anyway.

Good Faith Exception

The good faith exception was created by the U.S. Supreme Court as a way of enforcing the Fourth Amendment. The Fourth Amendment prohibits law enforcement from conducting unreasonable searches and seizures. The good faith exception protects police officers who had reasonable intentions, but who may have been mistaken in their actions. For instance, a police officer may search someone that he believes to be a suspect in a criminal matter. However, the man ultimately shows that he had an airtight alibi at the time of the crime, and is cleared of all suspicion.

This is where the good faith exception applies, in that it protects the officer from liability. The officer was not unreasonable or unfair in his search, as he legitimately believed the man to be a suspect and searched him in good faith. This is the type of situation wherein it appears that there is a lawful basis for the search but, in fact, there is not. The good faith exception also protects officers who rely on reasonably-issued search warrants that are ultimately deemed to be invalid.

The good faith exception is one that is rooted in purity, meaning that everyone involved must be on his best behavior, or the exception will not be applied. If one officer lies about the facts within a search warrant to push the search forward, and another officer believes the warrant to be reasonable and unknowingly carries out the search, a good faith exception cannot be applied. Similarly, if a warrant is written in such vague terms that a reasonable police officer would deem it invalid, then any evidence found during that search will be inadmissible in court.

Some states choose not to invoke the good faith exception at all, while others only rely on it under limited circumstances. Courts, however, tend to rule in good faith. Another common situation wherein the good faith exception would apply is one in which a law enforcement officer relies on an outdated law. He may believe he is acting within the scope of his responsibilities, yet he is unaware that what is expected of him has actually been updated. This is especially true when the Supreme Court makes a decision that reverses the laws established by the lower courts.

Good Faith Deposit

Good faith deposits are intended to signify a person’s legitimate interest in purchasing or renting something. For instance, most landlords collect a good faith deposit to ensure that the person seeking to lease their property is serious about it. In exchange for the deposit amount, the landlord takes the property off the market in anticipation of closing the deal. A good faith deposit may be required for the purchase of a large-ticket item, such as a car, and for the purchase of a home.

It is recommended that a person does his research before paying a good faith deposit to avoid a potential scam. If a person lays out a good faith deposit, but ultimately does not qualify for the apartment, then he is entitled to get his deposit back. If, however, the person is approved for the apartment, then his deposit will go toward the first month’s rent payment or his security, depending on the landlord’s preference. A good faith deposit is not a fee, so if the person is approved, his deposit will ultimately be applied toward some type of payment.

A good faith deposit can be largely beneficial. For example, a good faith deposit, once submitted, secures the property for the person, as it takes it off the market while the terms are being worked out. If, however, the person does not ultimately qualify for the property, then it is just as easily put back on the market. The purpose of a good faith deposit is to weed out the applicants who are not as serious about the apartment.

Good Faith Example Involving a Faulty Search Warrant

An example of good faith being brought before the courts involves a mistakenly issued search warrant. In August of 1981, police in Burbank, California were tipped off that Patsy Stewart and Armando Sanchez were holding themselves out as drug dealers. Police began to surveil their homes and follow up on leads that were based on the types of cars that would come and go from the two residences.

The police also identified Ricardo Del Castillo and Alberto Leon as being connected to the situation. Based on the information that the surveillance turned up, as well as that which was provided by a confidential informant, one of the officers wrote an affidavit to apply for a search warrant. A judge issued the search warrant, giving the police permission to search three of the suspects’ homes, as well as their cars, to potentially find evidence of their alleged crimes.

The police conducted the search and found what they were looking for: a significant amount of drugs and other related evidence. The suspects were then indicted on federal drug offenses. However, the warrant was later found to be invalid because the police had lacked probable cause in requesting it in the first place. The evidence that was found during the search was upheld, however, because the police performing the search had reasonably relied on the warrant to do so. This showed that the police had acted in good faith by doing what other reasonable officers would do in a similar situation.

A hearing was held in the case, whereupon the District Court concluded that the affidavit was insufficient in the officer’s attempt to prove probable cause. However, the court recognized that he had acted in good faith in authoring it. The court also vetoed the good faith exception suggestion made by the government. Here, the government had argued that the Fourth Amendment should not apply when evidence is seized in a reasonable manner and in good faith reliance on a search warrant.

The Court of Appeals affirmed the lower court, similarly refusing the government’s suggestion. The case was ultimately appealed to the U.S. Supreme Court, which agreed to hear it. Justice Byron White wrote the majority opinion, which stated, in relevant part:

“The suppression of evidence obtained pursuant to a search warrant should be ordered only on a case-by-case basis and only in those instances where exclusion would promote the purposes of the exclusionary rule. An officer acting in good faith and within the scope of a search warrant should not be subjected to Fourth Amendment constitutional violations. It is the magistrate’s or judge’s responsibility to ascertain whether the warrant is supported by sufficient information to support probable cause. However, the officer’s reliance must be objectively reasonable. Suppression remains an appropriate remedy where the magistrate was misled by information in an affidavit that the affiant knew was false or would have known was false except for his reckless disregard for the truth.”

With that in mind, the justices held that the evidence found in a case, even if it was found due to a mistakenly issued search warrant, could be introduced at Leon’s trial.

Related Legal Terms and Issues

  • Defendant – A party against whom a lawsuit has been filed in civil court, or who has been accused of, or charged with, a crime or offense.
  • Intent – A resolve to perform an act for a specific purpose; a resolution to use a particular means to a specific end.
  • Search Warrant – A court order that authorizes law enforcement officers or agents to search a person or a place for the purpose of obtaining evidence or contraband for use in criminal prosecution.
  • Tort – An intentional or negligent act, a civil wrong, as opposed to a criminal act, which causes harm to another.

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