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Simple English definitions for legal terms
firm-opportunity doctrine
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A quick definition of firm-opportunity doctrine:
The firm-opportunity doctrine is a rule that says people who work for a company cannot use information they learn while working there to take advantage of business opportunities that belong to the company. This means they cannot use the company's resources or take away potential profits that should belong to the company. It's like a fairness rule to make sure everyone plays by the same rules.
A more thorough explanation:
The firm-opportunity doctrine is a rule that applies to corporations and partnerships. It states that directors, officers, and employees of a corporation or partnership cannot use information they gain from their position to take advantage of any business opportunities that belong to the corporation or partnership.
For example, if a corporation is considering investing in a new technology, the directors cannot use that information to start their own company based on that technology. This would be a violation of the firm-opportunity doctrine.
In a partnership, the same principle applies and is called the firm-opportunity doctrine. For instance, if a partnership is considering expanding into a new market, one partner cannot use that information to start their own business in that market.