Bona fide is a Latin term meaning "good faith". In legal terms, it is often used to refer to a purchaser or holder who takes something without fraud, deceit, or knowledge of a lien or superior claim by another. Bona fide refers to a quality of genuineness. For example, a " bona fide holder " of a bill of exchange, is one who has taken a bill which appears ordinary on its face, before it was overdue, and in good faith and for value, and without notice of any defect in the title of the person who negotiated it to him.
In another example, a bona fide occupational qualification (BFOQ) is an exception to Title VII discrimination laws, which allows an organization to hire and employ individuals on the basis of the qualifications such as sex or national origin when reasonably necessary to the normal operation of that particular business or enterprise (business necessity). To defend a claim of age discrimination against an employee, an employer may establish that they were in compliance with a bona fide seniority system by proving that the system has legitimate goals and that the defendant uses the employees' length of service as the primary consideration in selecting employees for employment benefits, promotions, etc.
The following is an example of a state statute dealing with bona fide merchants:
"No license for a going out of business sale or a distress merchandise sale shall be issued except to a bona fide licensed merchant of the State of Alabama, and no such license shall be granted to an applicant who sets up an establishment or who acquires an interest in an establishment solely or principally for the purpose of conducting a going out of business sale or distress merchandise sale."