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partners from any transaction connected with the formation, con- duct, or liquidation of the partnership or from any use by him of its property.”26

Courts did not find it necessary to rely on this language in con- structing an elaborate and open-ended structure of fiduciary duties. In erecting that structure, judges enlarged upon, and then embroi- dered, the basic themes of care, loyalty, good faith, and disclosure.27 Indeed, it has sometimes seemed that “fiduciary” was something a judge called a defendant just before the defendant lost, usually citing Meinhard v. Salmon.28

Whether in fact what might be called “galloping Meinhardism” produced tough liability standards or merely tough rhetoric, and whether fiduciary duties should be all that tough in the first place, was and is open to debate.29 That debate pits the traditionalists, who see fiduciary duties as a moral mandate,30 against the contractarians, who see them as default terms in a standard form contract which the parties should be free to vary.31 The drafters of RUPA decided to steer a middle course, thus guaranteeing that it would be shot at by the partisans of both camps.32

  • 26.

    U.P.A. § 21 (1914).

  • 27.

    Courts did not create these duties out of whole cloth. The law of agency furnished

the basic material.

28. 164 N.E. 545 (N.Y. 1928). Judge Cardozo announced in ringing language that fi- duciaries must behave with a “punctilio of an honor the most sensitive” and that the “re- lentless and supreme” duty of undivided loyalty requires that “thought of self” be re- nounced. Id. at 546, 548. His language has acquired a life of its own. For example, at least one Florida judge has thought that the mere invocation of Meinhard, a 74 year old, 4-3 de- cision about a partnership opportunity, sufficed to resolve a much different issue—the de- cision of a New York law firm to close its Florida office. Beasley v. Cadwalader, Wicker- sham & Taft, No. CL-94-8646 “AJ,” 1996 WL 438777, at *5 (Fla. Cir. Ct. July 23, 1996), aff’d in part and rev’d in part, 728 So. 2d 253 (Fla. 4th DCA 1998). For two quite different academic views of the Beasley case, compare Allan W. Vestal, “Assume a Rather Large Boat...: The Mess We Have Made of Partnership Law, 54 WASH. & LEE L. REV. 487 (1997) (supporting the trial judge’s opinion), with Donald J. Weidner, Cadwalader, RUPA and Fi- duciary Duty, 54 WASH. & LEE L. REV. 877 (1997) (critiquing the trial judge’s opinion).

29. Robert W. Hillman, Business Partners as Fiduciaries: Reflections on the Limits of Doctrine, 22 CARDOZO L. REV. 51 (2000).

  • 30.

    The “moral mandate” characterization is Hillman’s. Id. passim.

  • 31.

    This view is associated with the “law and economics” movement. One hallmark of

this mode of thinking is a preference for contract over tort (or in this case, the “tort like,” since fiduciary duties are creatures of equity rather than law). As will no doubt become clear, my own perspective is strongly contractarian.

32. More recently, a new camp has emerged. This camp might be called the “commu- nitarian instrumentalists.” Members of this group do not reject economic analysis, but seek to use the insights of behavioral economics to support other-regarding legal norms. See, e.g., Margaret M. Blair & Lynn A. Stout, Trust, Trustworthiness, and the Behavioral Foundations of Corporate Law, 149 U. PA. L. REV. 1735 (2001). Professors Blair and Stout have been in the vanguard of this group, and their work has attracted considerable atten- tion. See, e.g., Symposium, supra note 18. It has not, however, achieved universal approba- tion. The contractarians have not jumped on board and are unlikely to do so, while at the other end of the spectrum, their work has been critiqued as insufficiently progressive.

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