It deviated from the year 1726 rule laid down in Keech v Sandford[1] that a fiduciary should leave open no possibility of conflict of interest between his private dealings and the job he is entrusted to do.

Charles Guth was the president of Loft, Inc., a candy and syrup manufacturer, which served a cola drink at its fountain stores.

Loft Inc's soda fountains purchased cola syrup from The Coca-Cola Company, but Guth decided it would be cheaper to buy from Pepsi after Coke declined to give him a larger jobber discount.

The Delaware Supreme Court, Chief Justice Daniel J. Layton, held that Guth had breached his fiduciary duties to Loft Inc, by taking an opportunity that the company was interested in, and could itself have exploited.

The occasions for the determination of honesty, good faith and loyal conduct are many and varied, and no hard and fast rule can be formulated.