Lessons to Be Learned: How the Policy of Freedom to Contract in Delaware's Alternative Entity Law Might Inform Delaware's General Corporation Law

Abstract

This article considers whether, as a result of the recent activity by alternative entities in the public markets, it is appropriate to revise Delaware's General Corporation Law (DGCL) to provide greater contractual flexibility to shareholders in all Delaware corporations to alter or re-define the duties of directors and officers. Two situations presently call for contractual modification of managerial duties in public corporations: (1) aiding and abetting liability of advisors to exculpated directors; and (2) non-stockholder constituencies of B (or "Beneficial") Corporations or other purpose-driven entity.

Keywords: freedom of contract, modification or elimination of corporate fiduciary duties; B Corporation; aiding and abetting liability; protection for advisors to corporate managers; stakeholders v. stockholders; contractarian theory for 2008; flexibility for "green" or environmental companies; L3C;