Doctrine Of Utmost Good Faith

Definition of 'Doctrine Of Utmost Good Faith'


A minimum standard that requires both the buyer and seller in a transaction to act honestly toward each other and to not mislead or withhold critical information from one another. The doctrine of utmost good faith applies to many common financial transactions.

Also know in its Latin form as "uberrimae fidei".

Investopedia explains 'Doctrine Of Utmost Good Faith'


In the insurance market, the doctrine of utmost good faith requires that the party seeking insurance discloses all relevant personal information. For example, if you are applying for life insurance, you are required to disclose any previous health problems you may have had. Likewise, the insurance agent selling you the coverage must disclose the critical information you need to know about your contract and its terms.



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