uberrima fides


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uberrima fides

‘the utmost good faith’. Both in England and in Scotland, certain contracts are such that the parties are obliged to observe the utmost good faith. Indeed, parties who are about to enter such a contract are held to be under an obligation to disclose all relevant matters before the contract. Recognized instances are insurance, fidelity guarantees for officials and probably partnership. The effect of this is to allow a party, quite often an insurer, to avoid liability as the contract will be treated as voidable if there has not been disclosure.

UBERRIMA FIDES. Perfect good faith; abundant good faith.
     2. This phrase is used to express that a contract must be made in perfect good faith, concealing nothing; as in the case of insurance, the insured must observe the most perfect good faith towards the insurer. 1 Story, Eq. Jur. Sec. 317; 3 Kent, Com. 283, 4th ed.