Shoot-Out Clauses in Partnerships and Close Corporations – An Approach from Comparative Law and Economic Theory

17 Pages Posted: 15 Dec 2011 Last revised: 2 Sep 2012

See all articles by Holger Fleischer

Holger Fleischer

Max Planck Institute for Comparative and International Private Law

Stephan Schneider

Max Planck Institute for Comparative and International Private Law

Date Written: July 1, 2011

Abstract

This article analyses shoot-out clauses as a popular means of resolving deadlocks in two member partnerships or close corporations. It presents the different varieties of shoot-out clauses developed in Anglo-American legal practice that are being increasingly discussed on the European continent. It goes on to look at their advantages and disadvantages by exploring the rich economic literature on partnership dissolution mechanisms in game theory. Finally, it focuses on the permissibility of these clauses and the doubts cast upon them in Germany, Austria, England and the United States.

This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation) respectively.

Keywords: shoot-out clauses, partnerships, close corporations, dissolution mechanisms, contractual design, validity

Suggested Citation

Fleischer, Holger and Schneider, Stephan, Shoot-Out Clauses in Partnerships and Close Corporations – An Approach from Comparative Law and Economic Theory (July 1, 2011). European Company and Financial Law Review (ECFR), Vol. 9, No. 1, pp. 35-50, March 2012, Max Planck Private Law Research Paper No. 11/13, Available at SSRN: https://ssrn.com/abstract=1963118

Holger Fleischer (Contact Author)

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
Hamburg, 20148
Germany

Stephan Schneider

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
Hamburg, D-20148
Germany

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