Contractual Good Faith Clause:

A contractual good faith clause is a provision that requires the parties to act honestly, fairly, and reasonably in the performance and enforcement of the contract. In construction, a good faith clause may be used to promote cooperation, trust, and mutual benefit among the parties, and to prevent opportunistic or abusive behavior. The clause typically includes a statement of the general duty of good faith, the specific obligations or prohibitions that flow from that duty, and the consequences of a breach of good faith. The purpose of a contractual good faith clause is to establish a baseline of ethical and professional conduct, fill in the gaps or ambiguities in the contract, and provide a basis for resolving disputes or terminating the contract. A contractual good faith clause should be carefully worded to balance the parties’ legitimate interests and expectations, and to avoid creating a vague or subjective standard that is difficult to enforce.