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The Corporate Contract in Changing TimesIs the Law Keeping Up?$
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Steven Davidoff Solomon and Randall Stuart Thomas

Print publication date: 2019

Print ISBN-13: 9780226599403

Published to Chicago Scholarship Online: September 2019

DOI: 10.7208/chicago/9780226599540.001.0001

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Delaware’s Diminishment?

Delaware’s Diminishment?

(p.110) Chapter Five Delaware’s Diminishment?
The Corporate Contract in Changing Times

Hillary A. Sale

University of Chicago Press

In the world of corporate law, Delaware reigns – or so the theory goes. This Chapter examines the reality of that statement, focusing on directors and their fiduciary duties in the context of the nexus of contracts theory and Delaware’s default-based system of governance. I argue that the nexus of contracts approach fails to explain the reality of today’s corporate governance structure and that the same is true with respect to Delaware’s role as a nexus in the nexus of contracts world. Instead, the private, contract-based space, to the extent it ever existed, has been occupied by the federal government for quite some time – and the occupation takes place both directly and indirectly. Two theories developed in other works are key to this analysis: the theory of publicness and the information-forcing-substance theory, or the manner in which federal securities disclosure provisions develop director fiduciary duties.

Keywords:   Securities regulation, disclosure, publicness, fiduciary duty, financial crisis, disclosure, federalism, directors, oversight, Delaware

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