Full Disclosure Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Full Disclosure, written in plain English, along with examples of how it is used.

What is Full Disclosure?

(n) Full Disclosure is act of providing all material information about an article or property intended or proposed to be transferred, which may influence the decision making of the buyer or proposed buyer.

History and Meaning of Full Disclosure

Full disclosure has its origins in the securities industry, where companies are required by law to provide all relevant information to investors before they purchase or sell securities. The concept of full disclosure has now expanded beyond securities to other areas of business and law.

Full disclosure means providing all pertinent information about a product or service. This information may include the terms of a contract, potential risks involved, or any other information that may influence the decision making of the buyer. Providers of goods or services have a legal and ethical obligation to make full disclosure to their customers.

Examples of Full Disclosure

  1. A real estate agent must provide full disclosure about any known issues with a property they are selling, such as previous flooding, mold, or structural problems.

  2. A car salesman must provide full disclosure about the history of a used car they are selling, including any accidents, repairs, or problems.

  3. An investment company must provide full disclosure to investors about the risks and potential returns associated with a particular investment opportunity.

  4. A website must provide full disclosure about their privacy policy and any data that they collect from their users.

Legal Terms Similar to Full Disclosure

  1. Material facts: This refers to any relevant information that could potentially influence a person's decision making.

  2. Due diligence: This is the process of investigating and verifying information before making a decision.

  3. Caveat emptor: This is a Latin term meaning "let the buyer beware," which emphasizes the buyer's responsibility to be fully informed before making a purchase.

  4. Fiduciary duty: This is the legal obligation of a person or organization to act in the best interests of another person or group, such as a financial advisor to their clients.