Also known as: full and complete disclosures · full disclosure · complete disclosure
Written by attorneys · grounded in primary & secondary sources — see below
A fiduciary obligation requiring revelation of all material facts to interested parties before ratification of a transaction that would otherwise breach a duty of loyalty or before enforcement of certain agreements.
Select any source to read its text and confirm it supports the definition.
Freya Freeman, managing partner at Freeman Engineering, sought to contract with her separate LLC for software services that would otherwise breach her duty of loyalty. She supplied Felicity French with complete details on pricing, resource use, and her personal interest. Felicity reviewed the materials and authorized the deal in writing. The authorization stands because full disclosure of all material facts preceded the partners' consent.
Faye Fuller, promoter of Frontier Capital, arranged for the future corporation to license technology from an entity she secretly controlled on favorable terms. She disclosed the conflict and terms only to one lead investor while planning additional shares for physicians who received no information. After incorporation the corporation discovered the arrangement. The corporation may recover the secret profit because disclosure failed to reach all contemplated initial shareholders.
Fumiko Fujimoto faced extended detention and requested access to the factual basis for her classification. Government counsel supplied a summary containing all material facts known at the time. Fumiko reviewed the materials with counsel before any hearing. The proceeding satisfies due process requirements because the disclosure enabled meaningful challenge to the government's position.
Felipe Figueroa faced criminal charges and sought to call his spouse as a witness. Counsel explained the scope of the spousal privilege and the effect of a voluntary waiver. The spouse received complete information about the consequences before deciding to testify. The testimony is admissible because the waiver followed full disclosure of all relevant legal effects.
Francesca Fiore, a director of Fidelity Trust, learned of a business opportunity that overlapped with corporate lines. She presented every material term, including her personal interest, to the remaining directors before pursuing the venture separately. The board declined to pursue the opportunity after review. No liability attaches because the presentation supplied full disclosure before any action.
All material facts surrounding the transaction must be revealed to the other partners before they authorize or ratify the act. Partial or summary information is insufficient. Once full disclosure occurs, the partners may validly approve the transaction under the uniform act.
Supporting sources
No. Disclosure and ratification must reach every person contemplated as part of the original financing plan who becomes an initial shareholder. Disclosure limited to lead investors leaves the promoter liable for secret profits.
Supporting sources
…out. Similarly, the physician must know all that a patient can articulate in order to identify and to treat disease; barriers to full disclosure would impair diagnosis and treatment. The Hawkins rule stands in marked contrast to these three privileges. Its protection is not limited to confidential communications; rather it…