Mergers & Acquisitions

Resources: Glossary

Don’t be confused or intimidated by any terms or abbreviations in the M&A world. You’ll find answers here.

Bad Faith

Definition

Intentional dishonesty or misleading someone by entering into an agreement without the intention or means to fulfill it.

Tips

There is an implied covenant of good faith in M&A transactions, even in non-binding agreements, such as a non-binding letter of intent (LOI). Good faith requires the parties to deal with one another honestly and fairly. Bad faith is unlikely to be specifically mentioned in the contract. Rather, it’s an implied duty in any commercial contract and doesn’t need to be specifically mentioned.