Under the common law, the Delaware Supreme Court held that the Court of Chancery's equitable powers did not reach so far as to permit ratification of corporate action, including stock issuances, found to be legally "void" under the governing organizational documents or the Delaware General Corporation Law (DGCL). This rule often carried harsh consequences, particularly in the case of technical violations of statutory requirements. In 2014, the Delaware legislature superseded these rulings by enacting DGCL Sections 204 and 205, which authorize the directors of a corporation, its shareholders, and/or the Court of Chancery to remedy defective corporate acts if certain procedures are followed.

The availability of the statutory cure turns on the distinction between actions taken without appropriate authorization, which may be ratified and/or validated pursuant to Sections 204 and 205, and those taken in the absence of corporate power, which may not. Vice Chancellor J. Travis Laster's decision last week in Applied Energetics v. Farley, No. CV 2018-0489-JTL, 2020 WL 4432271 (Del. Ch. Aug. 3, 2020), reviewed the text and history of the legislation and clarified that its provisions empower the court to cure not only corporate acts suffering from technical mistakes or lapses, but also most other acts taken without the required approval of directors, officers, or shareholders.