Uberrimae fidei is a legal term which is mainly applicable to the insurance industry, but is something that is worth knowing if you are entering into any legal contract. The full Latin term is ‘uberrimae fidei’ and it translates to ‘utmost good faith’. The principle means that the parties entering into a contract must act with the utmost good faith when it comes to disclosing relevant and material information about the agreement.

The principles of uberrimae fidei were first laid down by Britain’s Lord Mansfield in the case of Carter v Boehm (1766). In this case, Lord Mansfield declared that both parties to an insurance contract must act ‘uberrimae fidei’ with each other, meaning that they must disclose everything to each other which might impact their decision making when it comes to entering into the contract.

In the modern day, a contract filled with the ‘uberrimae fidei’ principle means that there is an expectation that all parties entering the agreement act in good faith and are open and honest with each other. When one party is entering into such a legal agreement, they must disclose all relevant information that might affect the other party’s decision. This relates not just to the details of the agreement itself, but also any information that might be relevant to one party’s decision making.

The emphasis of ‘uberrimae fidei’ is on building a relationship of trust between all parties involved in a contract. The anticipation is that by entering into an agreement which requires the adherence to this principle, all parties will be honest and transparent and the agreement will be beneficial for all.

Although the ‘uberrimae fidei’ contract is regularly used in the insurance industry, it has wider applicability as a term outlined in other legal agreements. In fact, ‘uberrimae fidei’ can be stipulated as part of any contract you enter into, meaning that all parties involved must be honest and open and disclose all material facts which could influence the other party’s decision to enter into the agreement. It is therefore important to consider the principles outlined in ‘uberrimae fidei’ whenever you are entering into any type of contract.