LLC Operating Agreements Can Be Binding Even If Not Signed By The Parties

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Members of a Delaware LLC should be aware of this opinion and not operate under the assumption that an LLC operating agreement is invalid simply because it is unsigned.

United States Corporate/Commercial Law

In the case of Seaport Village Ltd. v. Seaport Village Operating Company LLC, C.A. No. 8841-VCL (Sept. 24, 2014), Vice Chancellor Laster found that the operating agreement of a limited liability company ("LLC") can be binding upon the parties to that agreement, even if the agreement is not signed by the parties.

This holding is consistent with Section 18-101(7) of the Delaware Limited Liability Company Act (the "LLC Act"), which provides that "[a] limited liability company is bound by its limited liability company agreement whether or not the limited liability company executes the limited liability company agreement." 18 Del. C. § 18-101(7).

Members of a Delaware LLC and their attorneys should be aware of this opinion and not operate under the assumption that an LLC operating agreement is invalid simply because it is unsigned.

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