Bonafide is a latin term meaning “good faith”. In legal terms, it is often used to refer to a purchaser or a holder who takes something without fraud, deceit, or knowledge of lein or superior claim by another. Bona fide refers to a quality of genuineness.
The law requires all persons in their transactions to act with good faith and a contract where the parties have not acted bona fide is void at the pleasure of innocent party.
In the civil law these actions are called bonae fidei, in which the judge has a more unrestrained power (liberior potestas) of estimating how much one person ought to give to or do, for another; whereas, those actions are said to be stricti juris, in which the power of the judge is confined to the agreement of the parties.
Bona fide is used in many phrases like a bona fide purchaser, who is an innocent party who purchased something without knowledge of a third party involved. A bona fide holder can be someone who takes a financial tool in good faith and uses it without knowledge of other claims on it. Pertaining to tax law, bona fide business purpose which translates to taking part in a transaction that had to do with the business in the first place and done honestly. A bona fide residence is where a person lives.
In modern English , the term bona fide is a synonym for credentials, background, or documentation as to one’s identity.