Also known as: full and true disclosure · full disclosure
Written by attorneys · grounded in primary & secondary sources — see below
A requirement that a fiduciary or promoter reveal every material fact relevant to a transaction. This revelation enables informed consent or ratification by all affected parties. Without it, self-dealing profits remain recoverable and ratification fails.
Drew signed a separate contract through his LLC to build an add-on module for Apex Dynamics using Pacific Stack resources. He gave Russell only a brief oral summary omitting resource use and financial terms. Because the summary lacked full and true disclosure of the facts, Russell's apparent approval did not ratify the transaction.
Marjorie caused Blue Therapeutics to license a compound from her secretly controlled venture at favorable terms. She disclosed the conflict only to Alpha Life Sciences while physicians and patient advocates remained uninformed. The corporation recovered the profit because full and true disclosure of the facts never reached all contemplated initial investors.
Select any source to read its text and confirm it supports the definition.
The government sought to block publication of classified materials by the New York Times. After full and true disclosure of the facts in open court, the justices determined that prior restraint could not stand.
Executives at Texas Gulf Sulphur purchased shares without revealing material drilling results. Full and true disclosure of the facts to the market would have prevented liability under securities rules.
Westview Instruments presented expert testimony on claim meaning during a Markman hearing. Full and true disclosure of the facts in the patent record allowed the court to construe the terms as a matter of law.
Candidates challenged mandatory disclosure of contributors under federal election law. Full and true disclosure of the facts enabled voters to evaluate funding sources and deterred potential corruption.
All material facts surrounding the transaction must be revealed to every partner. Partial or summary disclosure is insufficient. Ratification fails and the transaction remains voidable when any material detail is omitted.
Supporting sources
Promoters owe fiduciary duties to the corporation and all persons contemplated as part of the original financing scheme. Disclosure limited to institutional backers leaves other contemplated shareholders uninformed. The corporation may therefore recover secret profits.
Supporting sources
No. Statutory defaults impose duties of loyalty that require full disclosure of material facts before any conflicting transaction. Silence does not waive the disclosure obligation or permit secret profits.
Supporting sources
After full and true disclosure of all material facts, disinterested directors or shareholders may validly disclaim the opportunity. Proper disclaimer before personal investment defeats a usurpation claim.
Supporting sources
…in return. And, as we recognized in Burroughs v. United States , 290 U. S., at 548, Congress could reasonably conclude that full disclosure during an election campaign tends "to prevent the corrupt use of money to affect elections." In enacting these requirements it may have been mindful of Mr. Justice Brandeis'…