Author
Prof Robert Rhee
Organisation/Institution
University of Florida Levin College of Law
Country
UNITED STATES
Panel
Corporate Law and Governance
Title
THE TOPOLOGY OF CORPORATE BAD FAITH
Abstract
This Article analyzes the topology of corporate bad faith. The doctrine of good faith is seen as ad hoc prophylactic rules that protect the corporation against discrete gaps in the traditional framework of the fiduciary duty of care and classic duty of loyalty. It has at least four separate, seemingly distinct proscriptions, and the commonality is that each form of bad faith causes a unique form of injury. But bad faith is not an archipelago of discrete rules housed within a common label. The jurisprudence of good faith is bound by a fundamental principle that seamlessly bridges critical gaps in the traditional fiduciary framework. Together with the classic duty of loyalty, bad faith protects the corporation comprehensively against all possible wrongs—all forms of conduct causing harms for which liability should attach as a remedy and deterrence. The principle of bad faith is the general principle of liability itself, which is simply a culpable mens coupled with a harmful actus. This principle forms the topology of bad faith, and determines the shape of duty and liability and how the doctrine may grow in the future. This Article shows that bad faith has two distinct varieties: private bad faith, which harms the corporation’s private economic interest as a profit-seeking venture; and public bad faith, which harms the corporation’s public noneconomic interest in conducting itself as a law-abiding person. This dichotomy has an important theoretical implication. The concept of public bad faith leaves open the possibility of principle that bad faith could be an instrument to enforce duties to the public so long as those obligations are imposed on the corporation through an external source of law or authority.
Biography
I am the John H. and Mary Lou Dasburg Professor of Law at the University of Florida Levin College of Law. I am a prominent scholar of corporate law and governance in the United States. I am the author of more than 50 scholarly articles and book chapters, and 6 books. I have been fortunate enough to be a regular participant in ASLI since 2018 (Seoul). I have been invited to present in past ASLI conferences in Singapore, Singapore, Bangkok, and Shanghai. I enjoy learning about the region and the collaboration with Asian colleagues. The prior papers I presented in ASLI conferences have been published in leading U.S. law journals, including Wake Forest Law Review, Vanderbilt Law Review, and Journal of Corporation Law. In 2017-2018, I was a Distinguished Lecturer and Fulbright Scholar at Yonsei Law School in Seoul, Korea. I have a genuine interest in the Asian region. My scholarly interest is strongly theoretical; my writings are not limited in applicability to just U.S. laws. I tend to write on topics that have general applicability. The topic that I am proposing for the 2026 conference deals with the nature of bad faith conduct by corporate fiduciaries, and it seeks to give concrete shape to duties and liabilities based on the idea of good faith. This topic has universal application to corporations in all nations.
