“It’s going to be you, not me, that solves these issues going forward,” Delaware Supreme Court Chief Justice Myron T. Steele told law students in the Ruby R. Vale Moot Courtroom on Monday, October 28th as he presented “The Contractual Duty of ‘Good Faith’ – An Unresolvable Enigma in the ABO World,” the first talk in the new Ruby. R. Vale Distinguished Speaker Series.
In her warm welcome Associate Provost and Dean of the Law School Linda L. Ammons
said, “We’re absolutely fortunate to be here in Delaware, the epicenter of corporate law,” and thanked Justice Steele for bringing the Delaware Supreme Court to the law school each year to hear oral arguments. She also thanked the Ruby Vale Foundation for sponsoring the speaker series.
Ruby R. Vale Professor of Corporate and Business Law and Institute of Delaware Corporate and Business Law
Director Lawrence A. Hamermesh
introduced Justice Steele, observing, “It’s an enormous privilege to have the Chief Justice inaugurate this speaker series.”
Chief Justice Steele, who recently announced his retirement from the Delaware judiciary on Nov. 30th, spoke about the need for greater clarity within the agreements that establish alternative business entities such as limited liability companies, particularly in relation to the establishment of the contractual duties of the company’s officers. Noting the proliferation of business entities that do not follow the traditional corporation model, he suggested that continued litigation in this area will have an enormous impact on the transactional lawyers drawing up the contracts, the litigators who challenge unclear provisions, and the judges who must rule in such cases.
“You draft to avoid litigation,” he said, adding that it was imperative for transactional lawyers to define the terminology they use within the document itself and “Focus on the goal – predictability, clarity, and consistency.”
The informative talk looked at the Delaware Limited Liability Company Act, and Chief Justice Steele shared a few insights on cases decided by the Delaware Supreme Court on “Good Faith” provisions in ABO Agreements. Following his remarks, he took a few questions from the audience, including his thoughts on contract provisions that specify arbitration as a way to avoid litigation.
“My man objection is that it doesn’t help build the common law,” Steele said of arbitration.
Chief Justice Steele previously served as Judge of the Superior Court and a Vice Chancellor of the Delaware Court of Chancery following a career in private practice. He has presided over major corporate litigation and LLC and limited partner governance disputes, and he writes frequently on issues of corporate document interpretation and corporate governance. Directorship Magazine consistently ranks him as one of the 100 most influential people in corporate governance in the United States. He is president of the Conference of Chief Justices and he has chaired the National Center for State Courts Board of Directors.