The Duty Of Candor

Joseph W. Bartlett, Special Counsel, McCarter & English, LLP

What obligations does one joint venturer owe the others to disclose proprietary information which is related to the business of the joint venture but not part of its central core? This issue is part of a larger conflict-of-interest problem and includes (as discussed below) corporate opportunity and self-dealing. The fundamental question has to do, again, with the essential nature of joint ventures in general and the given joint venture in particular. Is the beast a partnership (implying duties of good faith and fair dealing which go beyond the four corners of the partnership agreement), or a limited-purpose vehicle? In the latter case, the argument is that the partners owe each other only those duties expressly set forth in writing. Hence, if venturer A possesses information which might be useful to the venture (and/or to B) but which A wishes at all costs to protect, A may remain silent. The opposing view derives from Judge Cardozo's language in a landmark case: "joint adventurers, like copartners, owe to one another while the enterprise continues, the duty of the finest loyalty." The conflict problems are exacerbated if the joint venturers are otherwise competitors.

Joseph W. Bartlett, Special Counsel,

Full Bio

McCarter & English, LLP

McCarter & English, LLP is a firm of over 400 lawyers with offices in Boston, Hartford, Stamford, New York City, Newark, Philadelphia and Wilmington. In continuous business for more than 160 years, we are among the oldest and largest law firms in America.

Clients come first at McCarter & English. Their goals and priorities are what count. Our job is to listen to our clients, stay on top of the frequent changes that can affect their goals, and implement the strategies that will lead to success. Applying this approach effectively and consistently requires dedication and constant attention to many details. This client-centered philosophy has served our clients well and is responsible for our success and stability.

We are honored to be the chosen law firm of clients ranging from Fortune 100 companies to mid-market and emerging growth companies to individual people. When our clients do great things, we are pleased to get the assist.