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“Package Deal”: The Curious Relationship Between Fiduciary Duties And The Implied Covenant Of Good Faith And Fair Dealing In Delaware Limited Liability Companies, Monica E. White

University of Miami Business Law Review

Since 1977, the popularity of the limited liability company (“LLC”) has grown tremendously, overtaking the corporation and the partnership as the preferred business structure in many jurisdictions. Amidst this growth in popularity, a legal debate has sparked concerning the existence, nature, and extent of the fiduciary and contractual duties owed in the LLC context.

Drafters of LLC agreements can adjust fiduciary “norms” through limitation or, in certain jurisdictions like Delaware, through complete elimination of fiduciary duties. However, the implied contractual covenant of good faith and fair dealing (the “Implied Covenant” or the “Covenant”) remains and cannot be waived by the …