Full Video Transcript
Bad faith is a broad legal term that is applicable many situations. Generally, bad faith means that someone was dishonest or fraudulent in a business dealing. For example, if someone intentionally conceals a material fact about a product that is being sold or something that is important to a contract, then that person likely acted in bad faith. If one party acted in bad faith, the other party may be entitled to civil damages for any economic harm that occurred. However, bad faith is not a crime and will not result in criminal prosecution. In some cases however, the circumstances that constitute bad faith may also constitute fraud, which may be a crime and can carry a prison sentence. Bad faith can also occur in contract negotiations. For example, an employer has an obligation to negotiate in good faith with its employees. If it violates this obligation and does not negotiate in good faith, the employees may be entitled to damages.