Repossessions: 13.3.1 Application of Good Faith Requirement to Repossession Cases
UCC § 1-304 states: “Every contract or duty within [the Uniform Commercial Code] imposes an obligation of good faith in its performance and enforcement.” “Good faith” is defined as honesty in fact and observance of reasonable commercial standards of fair dealing.152 In addition, many states imply a covenant of good faith and fair dealing in all contracts as a matter of common law.153 Decisions applying these statutes vary as to what degree of fault will constitute lack of good faith.