Most hedge funds and their management entities are organized as Delaware limited liability companies (LLCs) or limited partnerships (LPs). By statute, the members or partners (partners) of these entities are given “maximum flexibility” to define their respective rights and obligations in the entity’s operating agreement or partnership agreement. Despite this clearly announced statutory policy favoring freedom of contract, Delaware courts also have developed a body of corporate-style fiduciary duties that prescribe and measure the conduct of the partners of Delaware LPs and LLCs. The tension between the partners’ contractual rights and obligations, on the one hand, and their fiduciary duties, if any, on the other, is a common and important theme running through the caselaw. Late last year, the Delaware Supreme Court issued an opinion that sheds new light on the important relationship between contractual and fiduciary duties, and that highlights once again the need for a cautious, detail-oriented approach to negotiating and drafting the agreements that govern hedge funds and their management entities. That opinion and other recent decisions by Delaware courts raise a number of important questions for practitioners who regularly advise or litigate on behalf of hedge funds and their principals. In a guest article, Sean R. O’Brien and Sara A. Welch, Managing Partner and Counsel, respectively, at O’Brien LLP, analyze these developments and provide practical guidance to assist practitioners in drafting and reviewing LLC and LP agreements.