On The Linkage Between The Fundamental Problem in Corporate Law and Standard Contracts Law

Corporate Ownership & Control, Vol. 1(4), 2004

5 Pages Posted: 30 Nov 2021

See all articles by Eli Bukspan

Eli Bukspan

Reichman University (The Interdisciplinary Center - Herzliya), Radzyner Law School; London School of Economics - Law School

Date Written: 2004

Abstract

The claim argued in this paper is that common law, as presently applied to public corporations (i.e., Corporate Law and Securities Law), is characterized by a broad consumer outlook that subsumes standard contracts law. The "consumerist" attributes of shareholders in public corporations rely on a widely accepted theoretical analysis of corporate law that focuses on the separation of ownership and control (the "agency problem"), which was developed in the wake of the growing might of mega-corporations.

Respectively, standard contracts law, including its consumerist elements, designed to deal with contractual failures arising from the nature of the bylaws of a public corporation, as a contract whose contents are not negotiable by the parties invited to adhere to it, and from the inferior economic and informational standing of share buyers in the capital market. As such, standard contracts law serves as an additional, justified and consistent legal tool for contending with the agency problem, whence the opening for its application to public corporations.

Keywords: Corporate law, standard contracts law

Suggested Citation

Bukspan, Eli, On The Linkage Between The Fundamental Problem in Corporate Law and Standard Contracts Law (2004). Corporate Ownership & Control, Vol. 1(4), 2004 , Available at SSRN: https://ssrn.com/abstract=3966153

Eli Bukspan (Contact Author)

Reichman University (The Interdisciplinary Center - Herzliya), Radzyner Law School ( email )

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Herzliya, 46150
Israel
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HOME PAGE: http://www.idc.ac.il/en/pages/faculty.aspx?username=bukspan

London School of Economics - Law School ( email )

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London, WC2A 2AE
United Kingdom

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