Good Faith
Synonyms: Bona Fide، Honest Dealing، Fair Dealing
Last updated: 2026-05-06
Short Definition
Legal principle obligating contract parties to deal honestly and fairly, protecting contractual relationship and preventing exploitation or fraud.
Overview
Legal Basis
Good faith is a principle derived from the Civil Transactions Law issued by Royal Decree No. (M/191) of 1444 AH, and Islamic jurisprudence provisions requiring good dealing. Supreme Court and public courts' jurisprudence applies the principle as a tool to achieve justice in complex cases. No specific text, but a general rule permeating all legislation.
Practical Example
A lessor knew the apartment has a major roof leak before leasing but didn't inform the lessee. The lessee signed the contract, and after a month discovered the leak which damaged his furniture (SAR 15,000 damage). The law says: the lessee is responsible for his belongings in the apartment. But the court may rely on good faith principle and obligate the lessor to compensate because he intentionally concealed a major defect. Expected result: 1) leak repair at lessor's expense. 2) damage compensation (SAR 15,000). 3) in egregious cases, exempting lessee from rent of affected period. The principle 'one may not benefit from their fraud' protects the good faith party.
Common Mistakes
- ✗Concealing major property defects from lessee — may lead to wider liability than just repair.
- ✗Exploiting formal contract loopholes to harm the other party — judge may cancel based on bad faith.
- ✗Obligating other party to unfair terms exploiting their need — judge may rule to cancel unfair clause.
- ✗Communicating in bad faith during disputes (lying, evasion) — strengthens other party's position.
- ✗Adopting 'everything not explicitly prohibited is permitted' rule absolutely — good faith principle modifies application.
International Differences
In French and Egyptian law, good faith is an explicit civil law principle. In Turkey, 'Dürüstlük Kuralı' is a pillar of obligations law. In Common Law (UK), the concept is relatively limited compared to civil law. In US law, 'Good Faith' is developed especially in Uniform Commercial Code (UCC). The Saudi advantage: integration of the principle with Islamic jurisprudence gives it ethical depth strengthening judicial application.