In three recent memorandum opinions, Southpaw Credit Opportunity Master Fund v. Roma Restaurant Holdings (Del. Ch. Feb. 1, 2018), CompoSecure v. CardUX (Del. Ch. Feb. 1, 2018, revised Feb. 12, 2018), and In re Oxbow Carbon Unitholder Litigation (Del. Ch. Feb. 12, 2018), the Delaware Court of Chancery revisited the distinction between void and voidable acts under Delaware common law.

Under Delaware law, a “void” act is one that the company lacks the power or capacity to take. Examples of void acts include an issuance of shares in excess of the number authorized by a corporation’s certificate of incorporation, or the entry into a contract to perform an illegal act. By contrast, an act is “voidable” if it was within the company’s power or capacity to take, but was not properly authorized or carried out in a specific case. If an act is void, it is not capable of being cured through ratification by common law means, such as subsequent approval or endorsement by the company’s board of directors or equityholders. Unlike void acts, voidable acts are capable of being validated by equitable means, such as ratification or acquiescence.