Law Commons^™

Reassessing Self-Dealing: Between No Conflict And Fairness, Andrew F. Tuch

Scholarship@WashULaw

Scholars have long disagreed on which of two rules is more effective when a fiduciary engages in self-dealing. Some defend the “strict” no-conflict rule, which categorically bans self-dealing. Others prefer the “flexible” and “pragmatic” fairness rule, which allows self-dealing if it is fair to beneficiaries. The centrality of this debate cannot be overstated: corporate law as a field is fundamentally concerned with self-dealing by fiduciaries. Yet a lack of firm data means that this debate has dragged on for decades, with no end in sight. This article makes a simple but powerful point: the entire debate is somewhat misguided because, …