Not by contract alone: the contractarian theory of the corporation and the paradox of implied terms

Gibbs-Kneller, D., Gindis, D. and Whayman, D. ORCID: https://orcid.org/0000-0003-1026-5646 (2022) Not by contract alone: the contractarian theory of the corporation and the paradox of implied terms. European Business Organization Law Review, 23. pp. 573-601. ISSN 1741-6205 doi: 10.1007/s40804-022-00241-7

Abstract/Summary

Contractarians view the corporation as a nexus of contracts, constituted by the express or implied consent of each party to or contracting with it. Strong form contractarianism takes this claim literally and holds that a corporation can be created and sustained by contract alone, thanks notably to the courts’ supportive gap-filling role. We argue that this view is undermined by the way courts actually treat implied terms. While courts do attempt to fill gaps and hold parties to their bargains, courts do not typically manufacture counterfactual consent by resorting to the hypothetical bargain logic of contractarianism. Even under the most flexible form of contract law, the common law contract, the capacity of courts to imply third-party obligations in multi-party contracts is highly limited. This makes the contractarian reliance on contract and the courts to construct the complex set of multi-party obligations that make up the corporate form implausible.

Additional Information	Unmapped bibliographic data: ST - Not by Contract Alone: The Contractarian Theory of the Corporation and the Paradox of Implied Terms [Field not mapped to EPrints] L1 - internal-pdf://2562708766/GGW - NBCA Final (2022) 23 EBOR 573.pdf [Field not mapped to EPrints]
Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/117601
Identification Number/DOI	10.1007/s40804-022-00241-7
Refereed	Yes
Divisions	No Reading authors. Back catalogue items Arts, Humanities and Social Science > School of Law
Additional Information	Unmapped bibliographic data: ST - Not by Contract Alone: The Contractarian Theory of the Corporation and the Paradox of Implied Terms [Field not mapped to EPrints] L1 - internal-pdf://2562708766/GGW - NBCA Final (2022) 23 EBOR 573.pdf [Field not mapped to EPrints]
Publisher	Springer
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