---
title: "Entire Fairness Standard"
type: Legal Term
source: https://casebriefly.com/legal-terms/entire-fairness-standard
---

# Entire Fairness Standard

The entire fairness standard is the most exacting standard of judicial review in corporate law, applied when the business judgment rule is rebutted, typically in cases involving self-dealing by directors or transactions with controlling shareholders. Under this standard, the defendant bears the burden of proving that the challenged transaction was entirely fair to the corporation and its minority shareholders, encompassing both fair dealing (the process by which the transaction was negotiated, structured, and approved) and fair price (whether the consideration was adequate in economic terms). The burden may shift to the plaintiff if the transaction was approved by a well-functioning independent committee or by an informed vote of disinterested shareholders, but even then, the court retains jurisdiction to evaluate the transaction's fairness. This standard was applied in cases such as Weinberger v. UOP, Inc. and represents the judicial response to fiduciary conflicts that make deference to the board inappropriate.

## Related Terms

- business-judgment-rule
- duty-of-loyalty
- fiduciary-duty-corporate
- merger

## Related Cases

- smith-v-van-gorkom
- meinhard-v-salmon

## Example

When a controlling shareholder caused the corporation to buy his failing subsidiary at an inflated price, the court applied the entire fairness standard and found the transaction unfair because the controlling shareholder dominated the negotiation process and the price exceeded every independent valuation by a wide margin.

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Source: [Entire Fairness Standard — CaseBriefly](https://casebriefly.com/legal-terms/entire-fairness-standard)