Good Faith (West's Encyclopedia of American Law)
Honesty; a sincere intention to deal fairly with others.
Good faith is an abstract and comprehensive term that encompasses a sincere belief or motive without any malice or the desire to defraud others. It derives from the translation of the Latin term bona fide, and courts use the two terms interchangeably.
The term good faith is used in many areas of the law but has special significance in COMMERCIAL LAW. A good faith purchaser for value is protected by the UNIFORM COMMERCIAL CODE, which every state has adopted. Under sections 1-201(9) and 2-403 of the code, a merchant may keep possession of goods that were bought from a seller who did not have title to the goods, if the merchant can show he or she was a good faith purchaser for value. To meet this test, the person must be a merchant, must have demonstrated honesty in the conduct of the transaction concerned, and must have observed reasonable commercial standards of fair dealing in the trade. A buyer would likely meet these requirements if the purchase proceeded in the ordinary course of business. If, on the other hand, the purchase took place under unusual or suspicious circumstances, a court might conclude that the buyer lacked good faith.
Where a nonmerchant purchases property that the seller lacks...
(The entire section is 743 words.)
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