Professor Gordon Smith has co-authored an article on “Fiduciary Discretion” that addresses, for example, the gaps in contracts in which fiduciary duties apply. The good professor has a post about it that includes the following introduction to the article:

Discretion is an important feature of all contractual relationships. In this Article, we rely on incomplete contract theory to motivate our study of discretion, with particular attention to fiduciary relationships. We make two contributions to the substantial literature on fiduciary law. First, we describe the role of fiduciary law as “boundary enforcement,” and we urge courts to honor the appropriate exercise of discretion by fiduciaries, even when the beneficiary or the judge might perceive a preferable action after the fact. Second, we answer the question, how should a court define the boundaries of fiduciary discretion? We observe that courts often define these boundaries by reference to industry customs and social norms. We also defend this as the most sensible and coherent approach to boundary enforcement.

This is practical scholarship that has practical applicability especially for agreements governing alternative entities in which fiduciary duties apply by default unless expressly waived. The formal citation for the article is: D. Gordon Smith & Jordan C. Lee, Fiduciary Discretion, 75 Ohio St. L. J. 609 (2014)