Contracts Without Law: Sovereign Versus Corporate Debt
G. Mitu Gulati
Duke University - School of Law
George G. Triantis
Stanford Law School
University of Cincinnati Law Review, 2007
Duke Law School Legal Studies Paper No. 152
Although extralegal enforcement is widely acknowledged, the conventional understanding of written contract provisions, such as the complex and detailed provisions in bond contracts, is that they are drafted to be enforced by law. This framing neglects the value of contracts in shaping extralegal forces, particularly where litigation is unlikely or not possible. Sovereign debt contracts provide an example in which lengthy and detailed contracts play a key role even though the debtor is largely litigation-proof. We examine how contract provisions in sovereign debt contracts improve the efficiency of creditor control outside the realm of legal enforcement.
Number of Pages in PDF File: 32Accepted Paper Series
Date posted: March 26, 2007
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