Also known as:safe-harbor test · safe harbour test · safe harbor · safe harbour
Written by attorneys · grounded in primary & secondary sources — see below
A statutory or regulatory provision that establishes objective quantitative or descriptive criteria. Satisfaction of those criteria conclusively demonstrates compliance with a broader legal standard or exemption from liability or penalty.
Sources & Authorities
How it applies
Common Examples
2
Vague Safe Harbor in Publicity Rule
A state bar adopts a trial publicity rule that bars statements creating a substantial likelihood of material prejudice but carves out a safe harbor for statements made without elaboration. An attorney issues a press release criticizing the prosecution's case as politically motivated. The bar seeks discipline, but the court holds the safe harbor unconstitutionally vague because it supplies no objective guidance on what counts as elaboration and invites selective enforcement against protected political speech.
Asset Sale Below Safe Harbor Threshold
Cobalt Advisors sells its advisory division, which accounts for over 90 percent of assets and revenues, and retains only a small internal research unit representing less than 5 percent of assets and revenues. A shareholder demands a vote. The transaction leaves the corporation without a significant continuing business activity and therefore requires shareholder approval.
Put it into practice
Test Yourself
10
Practice Questions5
· 1 primary source
Select any source to read its text and confirm it supports the definition.
Cases
Study Supplements
Common questions
Frequently Asked
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What makes a safe harbor provision conclusive rather than merely evidentiary?+
A safe harbor supplies fixed quantitative thresholds or clear descriptive criteria. Meeting those criteria conclusively establishes compliance or exemption, removing the need for case-by-case balancing or further factual inquiry.
Supporting sources
Can a safe harbor itself be struck down as unconstitutionally vague?+
Yes. When the safe harbor language fails to give fair notice of what conduct is protected, it risks discriminatory enforcement and violates due process even if the underlying prohibition is otherwise valid.
Supporting sources
How does the 25 percent test function in corporate asset-sale statutes?+
The statute treats a disposition as substantially all assets when retained operations fall below 25 percent of assets and 25 percent of revenues or pretax income. Retention below those thresholds triggers the shareholder-approval requirement.
Supporting sources
Business Associations Corporations and LlcsOrganizational structure including relationships between parents and subsidiaries · Sales of substantially all assetsUBEIntermediate