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Chapter 10. Under Contract > Good Faith or Bad Faith?
Good Faith or Bad Faith?
When two or more parties enter into a negotiation, it is under the assumption that all parties involved will be honorable and live up to their contractual commitments. Good faith also implies that everyone will be fair and truthful in order to satisfy the purpose of the initial meeting. When a party makes concessions she has no intention of fulfilling, she is acting in bad faith because she is deceptively giving the impression she is serious about the negotiation.
Misrepresentation and Duress
If the other party tells you something he knows is false, and you sign the contract based on your belief that his statement is true, you can have the contract rescinded in court. The same holds true even if the other party was unaware that the information was false. Keep in mind that if you have the contract cancelled, you’ll be required to give back any consideration you received. This includes money, products, keys to the company car, and warranties, to name a few.