Duhaime's Law Dictionary


Prospectus Definition:

A document in which a corporation sets out the material details of a share or bond issue and inviting the public to invest by purchasing these financial instruments.

Related Terms: Securities

A prospectus contains information necessary for a prospective investor or a bidder on a contract, to make an informed decision.

In PPM America, Inc. v. Marriott Corporation, Justice Alexander Harvey of the United States District Court (Maryland) wrote:

"Prospectus (is) a written or broadcast communication which offers or confirms the sale of a security."

At §77B(10) of Title 15 of the United States Code (2012):

"The term prospectus means any prospectus, notice, circular, advertisement, letter, or communication, written or by radio or television, which offers any security for sale or confirms the sale of any security...."

In the context of bidding on a contract:

"In this context, a prospectus is in invitation to bid on a contract. It contains various information necessary to formulate a bid, including a copy of the specific contract up for bidding."1

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