The Regression of Good Faith in Maryland Commercial Law

“Good faith,” in the affirmative or as the absence of bad faith, has always been a challenge to define and judge as a matter of conduct, motive, or both. Different tests apply a subjective standard, an objective standard, or even a combination of the two. Some parties may be held to different expectations than others. This determination of good faith has always been fact-driven and somewhat transcendental. Until recently, however, the question invoked a construct of fairness, resting on a two-pronged metric, at least insofar as several key titles of the Maryland Uniform Commercial Code were concerned. Since June 1, 2012, the various Maryland Uniform Commercial Code definitions of good faith have been stripped to the bare, subjective “honesty in fact.”1 The ramifications of this deviation from the Uniform Law Commission’s2 promulgated Uniform Commercial Code (“UCC”) and decades of jurisprudence with consistency among most states have yet to unfold; the bench and bar are just discovering the change. This comment explores how this occurred and what the potential consequences are and also recommends remediation of Maryland’s statutory language to conform to the UCC