FALL 2002
Sales
Law 7451

Computer ID	Day	Start Time	End Time	Room Number
84987	M	6:00	8:45	406 UL

Professor Budnitz
mbudnitz@gsu.edu
404/651-2135

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GOOD FAITH

1-203—every contract or duty covered by the UCC imposes an obligation of good faith in its performance or enforcement.

1-102(3)—good faith, diligence, reasonableness and care prescribed by UCC may not be disclaimed.

1-201(19)—good faith is defined as honesty in fact. A subjective test. "Pure heart, empty head." According to the Permanent Editorial Board of the UCC, courts should ask whether the party acted innocently. Inside the party's head, did he mean to behave honestly?

2-103(1)(b)—In contrast to 1-201(19), Article 2 imposes a different definition of good faith where there is a transaction in goods and one or more merchants. Good faith in that situation is defined as honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade. The latter is an objective test.

1-203, Official Comment. 1-203 "does not support an independent cause of action for failure to perform or enforce in good faith."