If the purchaser acquires the property by an honest contract or agreement and without knowledge of any defect in the title of the seller, or means of knowledge sufficient to charge the buyer with such knowledge, the purchaser is deemed innocent. Where a nonmerchant purchases property that the seller lacks legal title to convey, the issue of good faith is known both as the innocent purchaser doctrine and as the bona fide purchaser doctrine. If, on the other hand, the purchase took place under unusual or suspicious circumstances, a court might conclude that the buyer lacked good faith. A buyer would likely meet these requirements if the purchase proceeded in the ordinary course of business.

To meet this test, the person must be a merchant, must have demonstrated honesty in the conduct of the transaction concerned, and must have observed reasonable commercial standards of fair dealing in the trade. Under sections 1-201(9) and 2-403 of the code, a merchant may keep possession of goods that were bought from a seller who did not have title to the goods, if the merchant can show he or she was a good faith purchaser for value. A good faith purchaser for value is protected by the Uniform Commercial Code, which every state has adopted. The term good faith is used in many areas of the law but has special significance in Commercial Law. It derives from the translation of the Latin term bona fide, and courts use the two terms interchangeably.

Good faith is an abstract and comprehensive term that encompasses a sincere belief or motive without any malice or the desire to defraud others. Honesty a sincere intention to deal fairly with others.