Special-Circumstances Rule Law and Legal Definition

Special circumstances rule is a principle of corporate law that a director or officer has a fiduciary duty to disclose material inside information to a shareholder when engaging in a stock transaction under special circumstances. This fiduciary duty arises during special circumstances like when the shareholder lacks business expertise, the shares are closely held with no readily ascertainable market value, or the director or officer instigated the transaction.

Special circumstances rule is also known as special facts rule.