The fiduciary duty of loyalty may be modified or eliminated in the LLC context, where freedom of contract is paramount. For corporations governed by the Delaware General Corporation Law (DGCL), however, many Delaware practitioners understood that the duty of loyalty was sacrosanct, and, unlike voting rights, appraisal rights, or the right to sell shares, could not be waived, limited, or barred in advance by parties in an agreement or otherwise. In New Enterprise Associates 14. v. Rich, C.A. No. 2022-0406-JTL (Del. Ch. May 2, 2023), the Delaware Court of Chancery ruled that a covenant not to sue for breach of fiduciary duties in connection with the exercise of a drag-along provision to approve a merger or sale contained in a voting agreement among sophisticated stockholders in a Delaware general corporation was not facially invalid.

The court emphasized that the DGCL and Delaware common law allow for a greater space for fiduciary tailoring than is commonly recognized. For example, the court noted that Section 102(b)(7) of the DGCL, exculpating directors from monetary damages for duty of care claims, and Section 122(17), allowing a corporation to renounce corporate opportunities that are presented to its directors or officers to avoid loyalty claims for usurpation of corporate opportunities, both allow for fiduciary tailoring under Delaware corporate law. Further, Section 102(a)(3) allows a corporation to tailor fiduciary duties through a limited purpose provision to control or limit actions that fiduciaries can take even if they believe such actions are in the best interest of the corporation.