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total absence of intention to seek unfair advantage or to defraud another party; an honest intention to fulfill one's obligations; observance of reasonable standards of fair dealing.
EXAMPLE: Dion purchases securities for 60 percent of their face value from an associate. The associate had obtained the securities fraudulently, and the real owner then sued Dion for their return. Dion is protected from the owner's claims if he acted in good faith and is thus a bona fide purchaser. The owner states that Dion could not have acted in good faith since he purchased them at such a low cost in comparison with their face value. But that fact alone does not preclude Dion's good faith defense, since the low price can be justified by the associate's dire need for quick cash.
In property law, a good faith purchaser of land pays value for the land and has no knowledge or notice of any facts that would cause an ordinary, prudent person to make inquiry concerning the validity of the conveyance. Source: Barron's Dictionary of Legal Terms, Steven H. Gifis, 5th Edition; © 2016