Good-Faith Clauses and Agreements

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Good faith is a term that refers to the way people in a contract act towards one another. It is often used in relation to employee-employer relationships; good faith would cause employer and employee to treat one another respectfully.


A contract is an agreement between two parties to mutually complete certain terms. Typically, a contract involves an exchange: One party does something for the other party, but is reimbursed for it. Both parties usually benefit from the terms of a contract.

Good Faith

Good faith is an abstract legal term that describes the genuine intention of a person or persons engaged in a contract to deal honestly with one another. As it relates to contracts, it means that the parties signing the contract intend wholeheartedly to abide by and uphold the contract terms.


A good faith agreement clause in a contract states that both parties will uphold the terms of the contract and that if for some reason they cannot, they will work together in good faith to come to mutually beneficial terms of agreement.