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For example, if an officer made in error while maintaining their databases of warrants and a police officer searches the wrong person, good faith can be invoked. Also, if an officer does rely on a law that later changes, good faith can be invoked in that circumstance too.
(2) Every contract or duty under this code shall impose an obligation of good faith in its performance or enforcement. "Good faith" shall mean honesty in fact in the conduct or transaction concerned and the observance of reasonable commercial standards of fair dealing.
This means that, even though not specifically stated in the contract, it is implied or understood that each party to the contract must act in good faith and deal fairly with the other party in performing or enforcing the terms of the contract.
A final difference involves the parties' ability to waive or limit each concept. The implied covenant of good faith and fair dealing is automatically included in every contract and cannot be waived by the parties.
Implied Covenant of Good Faith and Fair Dealing Under this exception, an employer typically may not terminate an employee in bad faith or terminate an employee when the termination is motivated by malice.