Section 18-108, exemption, provides: «Subject to such standards and restrictions, if any, as provided for by its limited liability social contract, a limited liability company can and is entitled to compensate any member or manager or any other person of and against all claims and claims. The compensation provision (which understaysed the determination of progress) in the enterprise agreement is as follows: we have indicated in previous contributions that the Delaware LLC Act is an enabling statute, that is, it provides a framework on which the author of the enterprise agreement can rely. The Delaware Act contains many standard provisions, but compensation is not one of them. As a general rule, compensation refers to a situation in which a party (the «compensating» party) accepts or is required to cover the costs, losses and/or expenses of another party (the «compensated» party). Normally, an compensated person – as a condition of such an advance – is required to accept the return of the sums, provided it is established that the party compensated was not entitled to compensation. In many cases, the practicality of such a requirement is questionable, since the compensated person may not be able to repay amounts as a result of a judgment against him or her. The starting point and the end point of a possible claim is the operating contract itself. The most frequently discussed issue in compensation is the right of an insured person to obtain an advance fee. In practice, the right to promotion is as important as the right to compensation. Litigation and self-defense in the courts or investigations are costly in the real world. In the absence of a right to progress, the insured person may not be able to resort to compensation because he or she may not have the initial defence costs in the proceedings.
Unlike Section 145 of the DGCL, the law itself is not progressing. The Delaware courts have held that in the absence of a provision of the company agreement itself, there is no implied right to an advance on costs. The courts applied the company`s decisions to promotion rights. The courts have found that under Delaware law, the right to costs and the right to development are different concepts and that the right to reimbursement of expenses does not imply the right to further development. In the end, the restrictions on compensation under the DGCL did not prevent Freeman Family from making progress. However, the question of whether such restrictions would apply could have been avoided if the enterprise agreement had exploited the greater flexibility authorized by the Delaware Limited Liability Company Act (the «DLLCA»), which provides that an LLC can compensate any person for «all claims and claims.  Had the compensation provisions been explicitly extended beyond the typical corporate language, delaware courts would have been largely referred to the terms of the enterprise contract.  Instead, the Delaware Court of Chancery was to use corporate law jurisprudence to interpret the enterprise agreement.
The Delaware Court of Chancery found that (i) the contractual freedom underlying the CLLs allows the parties to adopt the corporation`s jurisprudence in the LLC enterprise agreements and (ii) in this particular case, «the parties intended to introduce corporate jurisprudence as indicated in their decision regarding the use of a contractual language equivalent to [the DGCL].» While it disagrees with Freeman Family on the applicability of corporate jurisprudence, the Delaware Court of Chancery found that Freeman Family was entitled to development because appeal rights were not just personal obligations and corporate law was respected «on the basis of fact.»  If you enter with us in the company deed we provide, the language of compensation of your new business contains.