Not by Contract Alone: The Contractarian Theory of the Corporation and the Paradox of Implied Terms

Abstract Contractarians view the corporation as a nexus of contracts, constituted by express or implied consent each party to contracting with it. Strong-form contractarianism takes this claim literally and holds that can be created sustained contract alone, thanks notably courts’ supportive gap-filling role. We argue is undermined way courts actually treat terms. While do attempt fill gaps hold parties their bargains, they not typically manufacture counterfactual resorting hypothetical bargain logic contractarianism. Even under most flexible form law, common law contract, capacity imply third-party obligations in multi-party contracts highly limited. This makes contractarian reliance on construct complex set make up corporate implausible.