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Full-Text Articles in Law
Contracts Without Courts Or Clans: How Business Networks Govern Exchange, Sadie Blanchard
Contracts Without Courts Or Clans: How Business Networks Govern Exchange, Sadie Blanchard
Journal Articles
Legal scholars have long recognized the close-knit community as an alternative institution for supporting trade when contract law and trusted courts are unavailable. But recent research suggests that another option may be available: heterogeneous business networks. What’s interesting is that these networks lack features traditionally seen as essential to community-supported trade. In particular, they lack preexisting noncommercial social ties that allow reliable and trusted information to spread at low cost, make exiting the network difficult, and enable coordinated sanctioning of cheaters. As a result, some leading scholars doubt that these networks are doing the work of sustaining cooperation. This Article …
Stealth Governance: Shareholder Agreements And Private Ordering, Jill E. Fisch
Stealth Governance: Shareholder Agreements And Private Ordering, Jill E. Fisch
All Faculty Scholarship
Corporate law has embraced private ordering -- tailoring a firm’s corporate governance to meet its individual needs. Firms are increasingly adopting firm-specific governance through dual-class voting structures, forum selection provisions and tailored limitations on the duty of loyalty. Courts have accepted these provisions as consistent with the contractual theory of the firm, and statutes, in many cases, explicitly endorse their use. Commentators too support private ordering for its capacity to facilitate innovation and enhance efficiency.
Private ordering typically occurs through firm-specific charter and bylaw provisions. VC-funded startups, however, frequently use an alternative tool – shareholder agreements. These agreements, which have …