Abstract

http://ssrn.com/abstract=1550840
 


 



Opting in and Out of Fiduciary Duties in Cooperative Ventures: Refining the So-Called Coasean Contract Theory


Charles R.T. O'Kelley


Adolf A. Berle, Jr. Center on Corporations, Law and Society, Seattle University School of Law

1992

Washington University Law Quarterly, Vol. 70, p. 353, 1992

Abstract:     
Professor O’Kelley comments on a familiar problem in the law of closely held business associations - the alleged exploitation of weaker or minority investors by stronger or majority participants. The fact pattern is simple. At the outset of the cooperative venture, a stronger participant assumes the role of proprietor, partner, or majority shareholder, while the weaker participant assumes the role of agent, partner, or minority shareholder. For whatever reason, the venturers do not explicitly guarantee or protect the weaker participant’s right to income or continued participation in the venture. Consequently, at some later date the stronger participant reduces or eliminates the weaker investor’s participation in or return from the cooperative venture. The weaker investor then seeks equitable relief, claiming that the stronger venturer’s actions violate the implied fiduciary duties owed to the weaker participant. This comment explores how efficiency minded judges should apply the Cosean Contract Theory, and, thus, some light on the theory itself.

Number of Pages in PDF File: 12

Keywords: coase, gap filling, transaction cost, Oliver Williamson, opportunism, adaptability, contract, corporation Coasean contract theory, close corporation, national form selection, partnership, cooperative venture, economics

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Date posted: February 11, 2010  

Suggested Citation

O'Kelley, Charles R.T., Opting in and Out of Fiduciary Duties in Cooperative Ventures: Refining the So-Called Coasean Contract Theory (1992). Washington University Law Quarterly, Vol. 70, p. 353, 1992. Available at SSRN: http://ssrn.com/abstract=1550840

Contact Information

Charles R.T. O'Kelley (Contact Author)
Adolf A. Berle, Jr. Center on Corporations, Law and Society, Seattle University School of Law ( email )
901 12th Avenue, Sullivan Hall
P.O. Box 222000
Seattle, WA n/a 98122-1090
United States
206 398 4252 (Phone)
206 398 4077 (Fax)
HOME PAGE: http://www.law.seattleu.edu/x1865.xml

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