Corporate Governance
Advanced
Contract Theory
An analytical framework for studying how parties design agreements and governance structures when actions, information, or future states cannot be perfectly specified.
Why It Matters
Contract theory connects corporate law to incomplete contracts, residual control rights, incentive pay, debt, bankruptcy, and firm boundaries.
Selected Literature
A short list of directly relevant archive entries.
1978
Introductory
Vertical Integration, Appropriable Rents, and the Competitive Contracting Process
Benjamin Klein, Robert G. Crawford, and Armen A. Alchian
Journal of Law and Economics
1986
Advanced
The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration
Sanford J. Grossman and Oliver D. Hart
Journal of Political Economy
1990
Advanced
1995
Advanced
Related Cases
1986
Financial Law
FDIC v. Philadelphia Gear Corp.
476 U.S. 426 (1986)
Whether an unfunded standby letter of credit backed by a contingent promissory note creates an insured deposit.
1988
Corporate Law
Blasius Industries, Inc. v. Atlas Corp.
564 A.2d 651 (Del. Ch. 1988)
Board action taken for the primary purpose of interfering with shareholder voting power.
1997
Securities Regulation
United States v. O'Hagan
521 U.S. 642 (1997)
Misappropriation theory of insider trading and tender-offer fraud rules.