West's Encyclopedia of American Law | Bad Faith

The fraudulent deception of another person; the intentional or malicious refusal to perform some duty or contractual obligation.

Bad faith is not the same as prior judgment or NEGLIGENCE. One can make an honest mistake about one's own rights and duties, but when the rights of someone else are intentionally or maliciously infringed upon, such conduct demonstrates bad faith.

The existence of bad faith can minimize or nullify any claims that a person alleges in a lawsuit. PUNITIVE DAMAGES, attorney's fees, or both, may be awarded to a party who must defend himself or herself in an action brought in bad faith.

Bad faith is a term commonly used in the law of contracts and other commercial dealings, such as