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Lookup NU author(s): Dr Derek WhaymanORCiD
This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).
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.
Author(s): Gibbs-Kneller D, Gindis D, Whayman D
Publication type: Article
Publication status: Published
Journal: European Business Organization Law Review (EBOR)
Year: 2022
Volume: 23
Pages: 573–601
Online publication date: 08/03/2022
Acceptance date: 21/01/2021
Date deposited: 24/01/2021
ISSN (print): 1566-7529
ISSN (electronic): 1741-6205
Publisher: Springer
URL: https://doi.org/10.1007/s40804-022-00241-7
DOI: 10.1007/s40804-022-00241-7
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