Waiver of Fiduciary Duties Clause
(Joint Venture LLC, DE)

Summary

This clause provides a waiver of the default fiduciary duties owed by members, managers, officers, and affiliates in a Delaware limited liability company. This clause includes practical guidance and drafting notes. While the Delaware Limited Liability Company Act (DLLCA) does not explicitly state when a manager or member of an LLC owes fiduciary duties to other members, managers, the company itself, or others, subsequent case law has made clear that managers and managing members owe default fiduciary duties while passive members do not. See Feeley v. NHAOCG, Ltd. Liab. Co., 62 A.3d 649, 662 (Del. Ch. 2012). In the joint venture context, co-venturers often desire to waive or eliminate the default fiduciary duties and instead rely on the express rights and duties in the LLC agreement. Accordingly, the DLLCA permits waiver or restriction of fiduciary duties in an LLC agreement. See 6 Del. C. § 18-1101(c). However, the LLC agreement may not eliminate the implied contractual covenant of good faith and fair dealing. In order to properly waive fiduciary duties under the DLLCA, the parties should flatly state that members have no duties other than those expressly articulated in the LLC agreement. See Fisk Ventures, LLC v. Segal, Civil Action No. 3017-CC, 2008 Del. Ch. LEXIS 158, at *42 (Del. Ch. May 7, 2008). For more specific information related to fiduciary duties, see the Fiduciary Duties Resource Kit. For additional guidance on broader joint venture provisions, see Key Provisions in Joint Venture Agreements. For a full template joint venture structured as a limited liability company see Limited Liability Company Agreement (Joint Venture, DE).