C. A state of mind consisting in (1) honesty in belief and purpose, (2) faithfulness to one's duty or obligation.
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to pronunciationLegal Definition -
A state of mind consisting in (1) honesty in belief and purpose, (2) faithfulness to one's duty or obligation, (3) observance of reasonable commercial standards of fair dealings in a given trade or business, or (4) absence of intent to defraud or to seek unconscionable advantage.
Black's Law Dictionary® Eighth Edition © 2004
Recent Usage -
Building and engineering contracts usually can only be terminated in limited circumstances, e.g. for serious default or insolvency. Some contracts confer the added power to terminate for a party’s own convenience. A recent Australian case addresses the question of how far a "termination for convenience" power goes. Can it be used to terminate a contract for any reason? Or can the power only be used in good faith? The case concerned a project for the supply of 46 helicopters to the Australian government. KBR were a subcontractor for portions of the works and services. The main contractor was dissatisfied with KBR’s performance, and sought through negotiations to "descope" much of its work. These negotiations came to nothing, but the main contractor then attempted to rely on a termination for convenience clause as a basis for terminating KBR. KBR sought and obtained an injunction to stop the main contractor from relying on the termination for convenience clause. It alleged that the attempted termination was made in bad faith, and that it was an implied term of the contract that the termination for convenience power must be exercised in good faith. The court upheld this argument (for interim purposes), and granted an interim injunction. MONDAQ 09 August 2007 Tim Kernutt and Jenny Savage, CMS Cameron McKenna LLP