Bad Faith
Dishonest or deceptive conduct in which a party intentionally fails to fulfill legal or contractual obligations.
What is Bad Faith?
Bad faith is intentional dishonesty, unfairness, or failure to fulfill legal or contractual obligations. In law and insurance, it occurs when a party deliberately misleads, denies valid claims, or acts in a way that violates trust or duty.
Why It Matters?
Courts can impose penalties, damages, or sanctions against parties acting in bad faith, protecting fairness and accountability.
Example
An insurer denies a valid claim without investigation, prompting the policyholder to sue for acting in bad faith.
Related Terms
Mediation
Litigation