For more information on the Delaware doctrine of independent legal significance, see this business lawyer article by C. Stephen Bigler and Blake Rohrbacher. Independent Legal Significance, Good Faith, Venture Capital, Delaware Corporate Law The doctrine of acts of independent importance in common law allows a testator to validly alter the disposition of his or her property without amending a will if acts or events that alter the disposition have meaning beyond avoiding the requirements of the will. Despite the fundamental status of the doctrine in Delaware, I could not find a single opinion issued by a California appeals court accepting the doctrine. The non-recognition of the doctrine of independent legal meaning leads to a „generic” element in business planning by creating uncertainty as to whether the form of a transaction will be recognized. Venture capital contracts are inherently incomplete. In interpreting these contracts, courts could formally respond to the expectations of the parties by considering only the clear meaning of the contract, or qualitatively enforce the presumed expectations of the parties, whether or not those expectations are expressed in the contract. The Delaware courts have opted for a formal approach. In doing so, they seem anxious to oblige the Contracting Parties to be complete. While the duty of good faith appears to address the inevitable incompleteness of contracts, courts largely ignore this obligation in preferred share cases. This omission, coupled with the doctrine of independent legal significance – which treats amendments to articles by merger separately from amendments to articles via board and shareholder approval – virtually ensures that preferred shareholders are exposed to opportunistic behavior on the part of common shareholders. Whether courts should respond to accusations of wrongdoing in this context depends on comparative institutional analysis.
Just because procurement contracts result in incomplete contracts does not mean that courts should be obliged to enforce such contracts. On the other hand, this article suggests that the application of the duty of good faith in this context could provide valuable incentives for renegotiation in unforeseen circumstances. Measures taken under one section of this Act are legally distinct and their validity does not depend on the requirements of other unrelated sections that the same end result could be achieved by different means, nor does it need to be evaluated. There are about 500 legal doctrines referenced in Black`s Law Dictionary. And that`s not all where they come from. Legal doctrines – many of which emerged before the existence of the United States – regularly shape the final outcome of disputes. While there is no way to adequately identify and describe all potential legal doctrines, in future blog posts I will provide a random list and brief description of interesting legal doctrines that have been successfully used in commercial litigation: Keith Bishop works with private and publicly traded companies in the areas of federal and state corporate and securities transactions, Compliance and governance: together. He is highly regarded for his in-depth knowledge of the unique business and regulatory requirements faced by businesses in the State of California. For „A Venture Capital after the Bubble,” sponsored by Willamette University School of Law, Portland, Oregon, March 5, 2004. Business Law, Public Liability and Ethics Commons, Commercial Organizations Common Law, Commons Contracts In Orzeck v. Englehart, 195 A.2d 375 (Del.
1963), the Delaware Supreme Court adopted what the Court of Chancery later called the „basic doctrine” of Delaware corporate law – the „doctrine of independent legal significance.” Warner Communications Inc. v Chris-Craft Indus., Inc., 583 A.2d 962, 970 (Del. Ch.), aff`d, 567 A.2d 419 (Del. 1989). The Delaware Supreme Court has defined the doctrine as follows: While many law firms have a lot of expertise in federal or Delaware corporate law, Keith`s particular focus on corporate and securities law in California is unusual. As a former California securities and financial institutions regulator, Keith has decades of experience. Independent legal significance, good faith and interpretation of venture capital contracts The doctrine is often applied in the following two circumstances:.