Nexus of Contracts

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Nexus of Contracts

Any contract or other thing that is related to anything else, especially something that causes something else.
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To nexus-of-contracts adherents, corporate rules are not mandatory but default rules; the parties are free to tailor the relationship to their own particular needs.
In combination, these rules and duties reject the nexus-of-contracts paradigm.
It is for this reason that the nexus-of-contracts rubric necessarily threatens shareholder rights and protection.
The nexus-of-contracts approach meshes poorly with corporate law in light of the very different assumptions that surround contracting parties versus the norm corporate law imposes on managers and dominant stockholders.
As developed above, there are multiple bases for disagreeing with the nexus-of-contracts view of the corporation.
104) bears significantly on the disconnection between the nexus-of-contracts paradigm and the corporation and shines a light on a core feature of corporate law: the division of authority between the board and the shareholders.
Therefore, the nexus-of-contracts notion that the board has wide-ranging authority to alter the shareholder relation to the board therefore is not only at odds with Blasius but also ignores the distinctions corporate law makes with respect to institutional prerogatives of the board and those of the shareholders, and, more fundamentally, why they are not mirror images of one another.
Regardless of the better approach for instituting an antidote for multi-forum litigation, this Article calls for courts to divert course from the deceptive nature of the nexus-of-contracts approach and return to the corporate statute to divine the relative rights of the board vis-a-vis the shareholders.
For an insightful analysis of the nuance that separates the early scholars whose collective work propelled the contractarian view behind the nexus-of-contracts metaphor, see William W.
301,303 (1993) ("[T]he nexus-of-contracts view of the modem corporation and the principal-agent explanation of some important aspects of the firm.