Obligation of Good Faith

The obligation of good faith is a fundamental principle in contracts that requires both parties to act honestly, fairly, and with genuine effort to fulfill the agreement's intent. It prevents behavior that would undermine the contract's purpose, such as deception, dishonesty, or unfair advantage. This duty promotes trust and cooperation, ensuring that both sides work toward mutual benefit rather than exploiting loopholes or acting in bad faith. Essentially, good faith encourages transparency and integrity throughout the contractual relationship, fostering a fair environment for everyone involved.