Today’s article examines what the author calls working in good faith. This subject receives insufficient attention in contemporary business society, despite the author’s extensive experience with successful transactions built on this foundation.
The term “good faith” appears frequently in real estate and commerce—think good faith deposits or estimates. More broadly, it represents “a sincere belief or motive without any malice or the desire to defraud others,” deriving from the Latin bona fide.
Good faith holds particular importance in Commercial Law. Under the Uniform Commercial Code adopted across all states, a merchant acting as a good faith purchaser receives certain protections. The purchaser must demonstrate honesty in conducting the transaction and observe reasonable commercial standards within their industry.
The concept also applies to non-merchants through the “innocent purchaser doctrine” or “bona fide purchaser doctrine.” When someone purchases property honestly, without knowledge of title defects, courts typically protect that buyer from claims by other titleholders.
Good faith principles extend throughout various legal areas: commercial paper (checks and promissory notes), labor law collective bargaining, and corporate governance through the Business Judgment Rule.
The author illustrates this principle through Fred Roa, founder of Tellesis Business Acquisitions NJ. Roa conducted over 300 business transfers by building relationships based on trust and integrity with serious business owners, operating in what he termed the “Trust Business.”
“You won’t regret it,” the author concludes.
