27 Pages Posted: 27 May 2005
Date Written: May 2005
The application of the doctrine of piercing the corporate veil to contract disputes has been attacked as undesirable. This article shows that applying piercing to contracts is desirable. Contract-centered veil-piercing functions akin to a penalty-default clause that encourages the efficient production of information, avoids wasteful precaution, and promotes the use of the corporate form for entrepreneurship.
Keywords: Veil Piercing, Contracts, Contract Law, Corporate Formalities, Undercapitalization
JEL Classification: K12, K22
Suggested Citation: Suggested Citation