University of Hertfordshire

By the same authors

Not by Contract Alone: The Contractarian Theory of the Corporation and the Paradox of Implied Terms

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Not by Contract Alone: The Contractarian Theory of the Corporation and the Paradox of Implied Terms. / Gibbs-Kneller, David; Gindis, David; Whayman, Derek.

In: European Business Organization Law Review, 08.03.2022.

Research output: Contribution to journalArticlepeer-review

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@article{d0c622c403aa4f8d8baa20416e71c703,
title = "Not by Contract Alone: The Contractarian Theory of the Corporation and the Paradox of Implied Terms",
abstract = "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{\textquoteright} 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.",
author = "David Gibbs-Kneller and David Gindis and Derek Whayman",
year = "2022",
month = mar,
day = "8",
doi = "10.1007/s40804-022-00241-7",
language = "English",
journal = "European Business Organization Law Review",
issn = "1566-7529",
publisher = "Springer",

}

RIS

TY - JOUR

T1 - Not by Contract Alone: The Contractarian Theory of the Corporation and the Paradox of Implied Terms

AU - Gibbs-Kneller, David

AU - Gindis, David

AU - Whayman, Derek

PY - 2022/3/8

Y1 - 2022/3/8

N2 - 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.

AB - 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.

U2 - 10.1007/s40804-022-00241-7

DO - 10.1007/s40804-022-00241-7

M3 - Article

JO - European Business Organization Law Review

JF - European Business Organization Law Review

SN - 1566-7529

ER -