Under standard accounts of corporate governance, capital markets play a significant role in monitoring management performance and, where appropriate, replacing management whose performance does not measure up. Recent case law in Delaware, however, appears to have altered dramatically the...

This paper explores how the opportunity to recontract affects investment and trade in contractual relationships when it is assumed that renegotiation is costly. In this world, recontracting retains much of the benefit that has been ascribed to it, including the realization of any surplus that is...

In most of the contract theory literature, contracting costs are assumed either to be high enough to preclude certain forms of contracting or low enough to permit any contract to be written. Similarly researchers usually treat renegotiation as either costless or prohibitively costly. This...

Private law theory must confront the plurality of values that inform the problems that private law addresses in practice. We consider Hanoch Dagan's and Michael Heller's The Choice Theory of Contracts as a case-study in the promise and perils that embracing plural values poses for private law...

Section 365 of the Bankruptcy Code prohibits enforcement of the once common quot;ipso factoquot; clause.quot; The clause excuses the solvent party from performance of the contract when the other party becomes insolvent. We show that the ability of insolvent firms to continue bad projects is...