Traditionally, the fiduciary duty of loyalty is implicated where corporate directors have conflicts of interest. In a major new decision, Stone v. Ritter, the Delaware Supreme Court determined that directors may also be disloyal when they act in bad faith. As a consequence, directors may be disloyal even when they have no conflicts of interest, and even when they intend to benefit their corporation. This Article reconciles this expanded fiduciary obligation with existing concepts of loyalty. The new loyalty is not (...) incoherent. Courts have adopted a recognizable understanding of loyal behavior - being “true” - that exists in other social spheres. Under this conception, loyal directors must not only act in the best interests of their corporation and its shareholders, they must also be honest with shareholders and comply with positive law. This Article then offers insights into the function of these expanded fiduciary duties. Although the new loyalty duties pose risks, there are good reasons to think they will provide net benefits. Following the recent Lyondell decision, it appears that the Stone case and its progeny will not result in significant revisions to the business judgment rule. However, the recent change in a director’s loyalty obligation may substantially lower information costs, giving better guidance to directors and simplifying coordination. In addition, the new conception of loyalty can also serve an important expressive function, enabling a more efficient level of trust among corporate actors, investors, and those who transact with the firm. (shrink)

This essay reviews John Gardner’s recent books, From Personal Life to Private Law, and Torts and Other Wrongs. Both books offer profound insights into private law’s concerns with justice and our reasons for action. The essay focuses on Gardner’s continuity thesis, and in particular on his idea that a third party may act on behalf of a wrongdoer as her delegee. Three settings are considered. First, I will discuss settings in which the state or another third party acts to remedy (...) a wrong without the wrongdoer’s consent. Second, I will review settings in which the legal remedies at issue – e.g., general damages or punitive damages – may not fit well with the idea that the state is acting on behalf of a wrongdoer. Third, I will analyze settings in which the state may be acting on behalf of right holders, yet still be concerned with the continuity thesis. Assessing each of these contexts offers further insights into the purpose of private law remedies. (shrink)

Fiduciary law is one of the most important areas of private law, governing a wide range of relationships that affect people in their daily lives. These new and innovative essays explore the foundations of fiduciary relationships and the duties fiduciaries owe to their beneficiaries.

Fiduciary law is one of the most important areas of law, governing a wide range of relationships that affect people in their daily lives. These new and innovative essays explore the foundations of fiduciary relationships and the duties of loyalty fiduciaries owe to their beneficiaries.

Bringing together leading theorists to analyse critically important philosophical questions at the intersection of contract and fiduciary law, Contract, Status, and Fiduciary Law demonstrates that these two areas of law, while distinctive, are deeply intertwined.