Business Judgment Rule
/ˈbɪznəs ˈdʒʌdʒmənt ruːl/
Definitions
- (n.) Doctrine protecting corporate directors from liability for decisions made in good faith, with due care, and in the corporation's best interests.
The court applied the business judgment rule to shield the directors from damages claims after the failed merger.
Forms
- business judgment rule
- business judgment rules
Related terms
See also
Commentary
This rule encourages informed and honest decision-making by directors without fear of hindsight liability, emphasizing procedural fairness over outcome.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.