Contractual Paradigm Research Articles

THE CONTRACT AND THE PARASITE

Michel Serres’s natural contract is not merely a proposal for an alternative legal or political paradigm. It offers something deeper: a new imaginary to unsettle and confront the deep assumptions of classical social contract theories and their retrojected justification: the state of nature. The argument of this article is that Serres systematically unpicks the conditions of possibility of the contractual paradigm in the modern social imaginary, replacing them with an original noise, a primacy of parasitic relationships and a telos of symbiosis. This reframes the natural contract as the visible profile of a comprehensive social and natural imaginary that radically refigures society and ecology otherwise than on the basis of primacy of reciprocal exchange relationships between self-sufficient individuals.

Trial by Design

Abstract The future of trial lies in customization. Throughout the Anglo-American world, the public model of criminal and civil procedure is gradually giving way to a private contractual paradigm, one which allows the litigating parties to tailor the evidentiary and procedural landscape of trial to fit their specific needs and preferences. Procedural and evidence rules are shifting from mandatory safeguards of public values to default rules and bargaining chips within the hands of the litigating parties. There is growing recognition in the ability of litigating parties in civil trials and of defendants in criminal trials to waive evidentiary and procedural rights, such as the right of cross-examination, the right to trial by jury, or the right to appeal. Courts are exhibiting a willingness to enforce choice of procedure and choice of evidence agreements, such as agreements to restrict the presentation of otherwise admissible evidence or to allow for presentation of otherwise inadmissible evidence.

Governance by Contract: The Implications for Corporate Bylaws

Boards and shareholders are increasing using charter and bylaw provisions to customize their corporate governance. Recent examples include forum selection bylaws, majority voting bylaws and advance notice bylaws. Relying on the contractual conception of the corporation, Delaware courts have accorded substantial deference to board-adopted bylaw provisions, even those that limit shareholder rights. This Article challenges the rationale for deference under the contractual approach. With respect to corporate bylaws, the Article demonstrates that shareholder power to adopt and amend the bylaws is, under Delaware law, more limited than the board’s power to do so. As a result, shareholders cannot effectively constrain the board’s adoption of bylaws with which they disagree. The resulting power imbalance offers reasons to question the scope of the contract paradigm. This analysis has two implications. First, it suggests that the Delaware courts and possibly the legislature may want to re-consider existing constraints on shareholder power in order to realize the contractual paradigm fully. In so doing, they will have to consider the normative implications of greater shareholder empowerment. Second, to the extent that Delaware law retains the existing limitations on shareholder power, this analysis suggests that courts should scrutinize board-adopted bylaws more closely.

Development Bank, Law and Innovation Financing in a New Brazilian Economy

This paper examines new ways of direct state intervention in Brazil's financial environment, which has a prevailing development bank (state-owned financial institution) – BNDES (National Economic and Social Development Bank). The main purpose of the article is to describe the new role and legal tools developed by BNDES to finance innovation and start up companies. The analysis shows that not only the financing of innovation has become paramount within the BNDES agenda, but also that this activity has been associated with a new rationale for intervention. Instead of taking the place of the financial market, BNDES tries to leverage the financial sector, mainly its venture capital sector. Particularly, it will examine four kinds of legal tools, which have been developed by BNDES since the beginning of the nineties to spur innovative companies. The legal tools are: (i) equity participations; (ii) credit contracts; (iii) indirect participation in private venture capital funds; and (iv) contract based on non-reimbursable resources. These legal tools not only represent a new contractual paradigm within BNDES financial operations, but also indicate a new way of public intervention. The paper claims that in financing a Brazilian knowledge based economy, BNDES has abandoned its top-down intervention strategy, adopting an iterative and dynamic kind of governance.

Resources, capabilities, competences and the theory of the firm

The aim of the paper is to point out some investigation lines which might result useful in building‐up a theory of the firm based on its resources, capabilities and competences (RCC). While the focus on RCC has helped to address some limitations of the standard contractual paradigm, a positive RCC theory of the firm hesitates to take‐off as its operationalization is still at an early stage. In order to move further towards this task, the paper suggests to: distinguish the nature of the problems of the contractual perspective which an alternative theory should solve (Section 2); identify those RCC features which are essential in connecting them to the core issues of the theory of the firm, that is, existence, boundaries and organization (Section 3); evaluate the implications of any hybridisation attempt between the two firm perspectives (Section 4). The paper then moves some exploratory steps along these research directions, providing some arguments about the opportunity to pursue them further.

The Contractual Architecture of Public Policy: A Critical Reconstruction of Lowi's Typology

We outline a theory of public policy using our transaction space model of contractual analysis. This approach is based on transaction cost economics, game theory, and the contractual paradigm. It treats government activities, including statutes and the organizations that administer them, as long-term contracts negotiated to economize on the costs of decision making. We return to Theodore Lowi's typology of public policies--although our construction departs from its underlying assumptions in numerous ways--to answer two questions. First, how does government come to be involved in some coercive activities and not others? Second, why does Lowi's typology appear to fit some policies so well and to be inadequate for others? According to our theory, demand for government intervention arises when people cannot resolve private problems of coordination, division, and defection, each a distinct dimension of transaction space. Lowi's typology fits unidimensional problems best. Multidimensional problems are more complex but consistent with the model.

Bargaining and Constitutional Contracts

Bargaining and Constitutional Contracts