Professor DiMatteo on LLCs and fiduciary duty in US law

On 3 April 2018, Prof. Dr. Larry A. DiMatteo, Huber Hurst Professor of Contract Law & Legal Studies at the University of Florida, visited the Faculty of Law of the University of Rijeka. On that occasion he held a lecture for students and faculty titled Rise of American limited liability company: managers and members’ duty to act in good faith? In a two hours long talk he neatly explained the concept of fiduciary duty and the components of duty of care in carrying out company-related matters along with “business judgment” rule, uninformed decision-making and failure to monitor; duty of loyalty towards the company and related conflict of interest and company opportunity; and, finally, duty to act in good faith. Such fiduciary duties are often stipulated in the operating agreement. He concluded by saying that LLCs, which are on the rise as opposed to the corporations which belong to the past, are regulated in different ways across jurisdictions in US states. But, their common denominator is flexibility of contract law given that LLCs are contractual creations. This lecture was an excellent opportunity for students and faculty to learn about an interesting aspect of US law and broaden their comparative law perspectives.