Every business deals with contracts and each contract has its own implied conditions. These conditions require each party to act in good faith, because failure to act in good faith could result in a breach of contract – and possibly a civil lawsuit.
What Does Good Faith Mean?
Good faith refers to the honesty in fact and that both parties agree to not lie, steal or cheat each other. For business owners who are selling products, that good faith behavior means that they are in compliance with safety and federal regulations and that they are being honest with the products they are bringing to the market.
By not acting in good faith, a negligent party could be held liable based on what is in their contract.
Examples of Acting in Bad Faith
- Not performing the action promised within the contract or cutting corners to get the task done – resulting in a subpar performance.
- Contracting with one party only to turn and use a competitor instead.
- Tampering with another party’s product in order to gain a competitive edge.
- Receiving an estimate and signing a contract based on that estimate, only for the other party to change the amount after the contracts are signed – and without giving the other party time to reconsider.
What if the Party Fails to Act in Good Faith?
If your business has entered into a contract and the other party refuses to act in good faith as promised, you should consult a San Antonio business lawyer right away. Just because the other party does not act in good faith does not necessarily mean your requirements of the contract are void; therefore, you may be obligated to still act in good faith – regardless of how the other party has behaved.
By hiring an attorney, you may be able to dissolve the contract agreement and possibly seek monetary damages from the party that did not act in good faith. Because contract law is very complex, an attorney is required to determine your liability, and the proper damages you can seek from the other party for not acting in good faith.
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