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Good faith in corporate law – an independent fiduciary duty or an element of the duty of loyalty?

Author

Listed:
  • Adina Ponta

    (Faculty of Law, Babes-Bolyai University, Cluj-Napoca)

Abstract

Taking the duty of loyalty as a starting point, which we consider to be the director’s core fiduciary duty, this paper aims at identifying the contours of good faith in corporate law and the interpretations of this institution in corporate governance. The objective of the paper is to demonstrate the autonomy of good faith, along with the duty of care and the duty of loyalty. The paper displays the traditional legal approaches of this institution, both in continental civil law and in common law literature and jurisprudence and exhaustively describes the obligations that compose or even define this concept. Due to its amplitude, the duty of good faith enabled courts to articulate subsidiary fiduciary duties that meet social changes and transformation within business law. By means of cited case law, the conclusion will show that due to the nature, content and effects of situations where specific obligations are met, these may not be incorporated as elements of the traditional duty of care or duty of loyalty.

Suggested Citation

  • Adina Ponta, 2016. "Good faith in corporate law – an independent fiduciary duty or an element of the duty of loyalty?," Juridical Tribune - Review of Comparative and International Law, Bucharest Academy of Economic Studies, vol. 6(2), pages 117-133., December.
    • Handle: RePEc:asr:journl:v:6:y:2016:i:2:p:117-133
    as

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    File URL: http://tribunajuridica.eu/arhiva/An6v22/8%20Ponta.pdf
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    References listed on IDEAS

    as
    1. Adina Ponta, 2015. "The business judgement rule – approach and application," Juridical Tribune - Review of Comparative and International Law, Bucharest Academy of Economic Studies, vol. 5(2), pages 25-44, December.
    2. Gerner-Beuerle, Carsten & Paech, Philipp & Schuster, Edmund-Philipp, 2013. "Study on directors’ duties and liability," LSE Research Online Documents on Economics 50438, London School of Economics and Political Science, LSE Library.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    good faith; duty of loyalty; duty to duly inform; fiduciary duties; agency; directors' liability;
    All these keywords.

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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