Navigating New Boundaries in Contracting

The recent amendment in Delaware law has shifted the landscape of corporate contracting, allowing boards more leeway to creatively negotiate terms without stringent oversight. This change resembles a basketball rule revision, granting a metaphorical 'hall pass' to engage in practices previously deemed questionable. While the amendment does not alter foundational fiduciary laws, it introduces ambiguity regarding enforcement, especially for non-public companies where shareholders might remain unaware of preferential treatment among stockholders. The potential for increased creative contracting raises concerns about transparency and accountability, as transactional attorneys may push against these newly defined boundaries, prompting scrutiny of existing fiduciary obligations and shareholder awareness.