# Standard of Conduct > Standard of Conduct means acting in good faith and in the best interests of [organization], without believing the actions to be unlawful. **Term:** Standard of Conduct **Last updated:** 2026-07-29 ## Definition ## What Standard of Conduct Means in a Contract A Standard of Conduct clause sets out the behavioral yardstick that a person, usually a director, officer, employee, or agent, must meet in order to be treated as having acted properly under an agreement. It is most commonly tied to indemnification provisions, where the organization agrees to cover legal costs or losses only if the covered person met this standard. The core elements typically require that the person acted in good faith, reasonably believed their conduct was in, or not opposed to, the best interests of the organization, and, in criminal contexts, had no reasonable cause to believe the conduct was unlawful. This concept functions as a gatekeeper. It does not guarantee protection or payment; it simply defines the threshold that must be crossed before other contractual promises, such as indemnification or reimbursement, become operative. Because it is a threshold test, the wording chosen for the standard has outsized influence on how disputes are resolved later. The clause is often found alongside broader governance language, and organizations frequently mirror it in an internal