City of Hope v. Genentech: Keeping Fiduciary Duties Where They Belong

摘要

In City of Hope, the California Supreme Court took an important stand to provide much-needed clarity for this area of law, stopping fiduciary duty "creep" and, perhaps more broadly, the "tortification" of contract law. City of Hope reaffirmed the freedom of sophisticated parties to define their relationships through contract. It also avoided imposing punitive measures upon a party whose position concerning its breach, though wrong in the eyes of the court, was objectively reasonable. Furthermore, and perhaps most importantly for the efficiency that contract law provides to the marketplace, the court chose not to cloud contract law by finding fiduciary duties very similar to those imposed by contract.