I am emerging from a rabbit hole of research that began approximately 3.5 hours ago. The question was inspired by teaching the 2002 Delaware Supreme Court case,
Download Gotham 817_A.2d_160, in my unincorporated business associations class and students' drafting of fiduciary duty waivers in a limited partnership agreement. Many of you are already aware that Delaware allows for the complete elimination of general partners' fiduciary duties. I knew that Delware was an outlier in this area, but I wasn't certain by how much. So 3.5 hours and a 50 state (plus D.C.) survey later, I have a concrete answer. Only Delaware (
Download Delaware GP Fiduciary duty statute) and Alabama (
Download Alabama Statute) statutes allow for the complete elimination of fiduciary duties for general partners. The remaining 49 jurisdictions surveyed only allow for the expansion or restriction of fiduciary duties, but not the elimination. Of those 49 jurisdictions, 20 have a stand alone provisions that outline the fiduciary duties of general partners, and 29 statutes establish the minimum fiduciary duties for general partners by linkage to the traditional partnership statutes. Of the 29 jurisdictions that rely on linkage to traditional partnership statutes, 13 use a Uniform Partnership Act (1914) "accounting" style fiduciary duty provision and 16 use a revised Uniform Partnership Act (1997) enumerated fiduciary duties style provision.
My initial research table is available here: Download LP Fiduciary Duty waiver Chart.
My findings raise several questions. The first is a curiosity as to where else are Delaware statutes outliers and what does this say about the reach of Delaware law? The ubiquity of Delaware law is limited by the incentives for foreign entities to avail themselves of Delaware state laws, the challenge to Delaware's dominance is seen most clearly with closely-held firms.
-Anne Tucker