Good Faith

Definition: Honesty of purpose and fair dealing in the relevant transaction or performance of an obligation.

Example

A buyer truthfully submits financial information and makes a genuine effort to satisfy a financing condition.

Keep the distinction clear

A good-faith deposit is a common name for earnest money; paying one does not prove every later action was honest or satisfy all contract duties.

Related terms

Bona Fide · Earnest Money · Performance (Contract)

Keep studying

What Strengthens a Purchase Offer? Preapproval and Earnest Money

References: California DRE: real estate glossary

Pronunciation (US): GOOD FAYTH (capitals show stress)

Pronunciation reference: Merriam-Webster