Bad faith describes dishonest, abusive, or intentionally unfair conduct within a legal relationship, duty, claim, or process.
Why bad faith matters
Bad faith matters because some legal rules impose consequences when a party uses rights, discretion, or legal process dishonestly. Bad-faith findings can affect damages, sanctions, insurance disputes, contract enforcement, fiduciary claims, and settlement behavior.
The term is context-specific and should not be used as a casual synonym for disagreement.
Where bad faith appears
Bad faith appears in contract disputes, insurance claims, litigation sanctions, settlement negotiations, fiduciary-duty disputes, employment disputes, and commercial cases.
Practical example
A party with clear information about a contractual obligation deliberately delays performance to pressure the other side into accepting worse terms. The conduct may raise bad-faith arguments depending on the agreement and law.
How bad faith differs from nearby terms
Bad faith differs from breach of contract because a breach may occur without dishonest intent. It differs from fraud because fraud usually requires a specific false representation or deceptive act.
Related terms
Quick knowledge check
Why is bad faith more than simply losing or breaching a legal dispute?