Family-owned,limited close corporations and protection of ownership

Protected ownership and freedom of contracts are two basic parts of the institutional framework of successful countries according to Douglass North, winner of the Nobel Prize in 1993. The incentives to make long-term investments are strengthened if ownership rights are protected and freedom of contracts is a basic element in the process of efficient allocation of scarce resources. An important engine in prosperous societies is the family firm. Most companies in these societies can be classified as family firms and a major part of GDP is produced by family businesses. Consequently, how ownership is protected in family firms is an important issue.Three important factors of private ownership of property are the rights to determine use of owned assets, the return generated from them and to transfer the assets at mutually agreeable terms to a new owner(s).The incentives of a founder entrepreneur to put efforts into the establishment of a firm are determined by all the three factors. We will here pay special attention to the third factor, transfer of the ownership of the firm. The founder often places contractual restrictions on such transfers to ensure that the structure of ownership is stable and that the firm stays in the family. The possibility to do so is part of the freedom of contracts and is associated with the extent of ownership held as well as the incentives to invest in new businesses.This paper is primarily about how protection of family ownership can be achieved from a legal point of view and discusses the reasons to enforce these legal relationships in the future for second, third, fourth etc. generations of family owners.     

'Contractual Governance' of Deviant Behaviour

This paper seeks to analyse and make sense of the growing role and implications of forms of 'contractual governance' that are emerging in diverse fields of social life and public policy in England and Wales, both within and beyond criminal justice. Collectively, these modes of control mimic and deploy 'contracts' and 'agreement' in the regulation of deviant conduct and disorderly behaviour. The rise of contractual governance is explored against the background of a crisis in penal modernism and the challenge of crime prevention. Contractual governance in a number of fields is outlined and discussed, including home-school agreements in education; acceptable behaviour contracts and introductory tenancies in social housing; restrictive covenants in private residential neighbourhoods; domestic security and private residential patrols and youth offender contracts. It will be argued that, in these contexts, contracts seek to induce conformity and order through modes of governing the future that depart significantly from traditional modes of policing and that recast social obligations in forms of parochial control.     

Banking in a theory of the business cycle: a model and critique of the Basle Accord on risk-based capital requirements for banks

This paper presents a theoretical framework for understanding the investment decisions and financing decisions of financial and non-financial enterprises over the business cycle. At the core of this theoretical framework is an agency problem between relatively more risk averse depositor/bondholders and relatively less risk averse stockholders. The solution to this agency problem is a corporate governance system that takes the form of an up-front contract that directs managers to make portfolio/investment decisions in the interest of their stockholders, and financing decisions in the interest of their depositor/bondholders. This enables depositor/bondholders to offset any risk shifting portfolio/investment decisions made on behalf of the shareholders thereby mitigating the moral hazard problem among debtors and creditors. The Basle Accord on risk-based capital requirements for depository institutions is one particular regulatory application of this more general theoretical framework. The paper concludes with a comparison between the Basle Accord and the 100% reserve or narrow banking proposal as the means of achieving a risk-free medium of exchange and a financial system that facilitates the optimal transfer of resources from savers to investors consistent with society’s aversion towards risk.     

Environmental risks,the judgment-proof problem and financial responsibility

This paper examines a setting in which a firm is liable to pay environmental damages caused by its activity but may not have sufficient wealth for repair of damages. In order to induce the full internalization of the environmental cost, the firm is required to demonstrate a financial guarantee from a solvent party that covers this cost. Since the firm and the guarantor are joint liable for the harm caused by the firm, it is in the interest of the guarantor to design the guarantee contract in order to induce the firm to take an adequate level of prevention. First, I show that financial responsibility regime may achieve the social optimum. Secondly, I identify a particular form of contract in the set of contracts which induce the socially optimal level of prevention. This contract is closed to an alternative risk transfer product referred to as the spread loss treaty.     

ADMINISTERING LABOR CONTRACTS USING TRANSACTION-COSTS ECONOMICS

Labor contracts are rules of governance between workers and employers over time. The efficiency of the transaction and the relationship can be affected by the provisions of the contract. It is argued that the characteristics of the firm and the workers determine what kinds of contracts and governance of the provisions of contracts are most efficient. Among other results, it is argued that collective bargaining, together with grievance procedures and arbitration, is the most efficient form of labor contracting and governance for large firms with skilled work forces.     

Medical restrictive covenants in Illinois: at the crossroads of Carter-Shields and Prairie Eye Center

This article examines the history, development and treatment by Illinois courts of medical restrictive covenants. The authors highlight two recent cases from Illinois, one from the Supreme Court and the other authored by an appellate court panel. The article concludes by providing not only a forecast of how such covenants should be treated by Illinois state courts in the future, but also a pathway for the expectations of health care practitioners who wish to use restrictive covenants in their employment relationships with their colleagues.     

Covenanting for Nature: A Comparative Study of the Utility and Potential of Conservation Covenants

Conservation covenants over private land are extensively used in some jurisdictions to secure a wide range of public benefits: in some cases primarily to promote nature conservation, while elsewhere to foster conservation alongside greater public access to ‘green’ space. This article considers the use of conservation covenants in New Zealand, Scotland, and England and Wales. It argues that they can play a unique role in balancing nature conservation, property rights and increased public access to private land. It reviews proposals for new legislation in England and Wales and argues that, if it is to be successful, the potential of conservation covenants to secure greater public access to private land should be more strongly emphasised. Their successful use in New Zealand shows that, while recognising the important balancing function that they can perform, this emphasis is critically important if covenants are to fulfil their potential to ‘reconnect’ people and nature.     

公司债券持有人利益法律保护研究

债券持有人作为一种特殊的债权人,因信息不对称、契约不完备、公司的有限责任制度等内生的经济特征决定了其弱势地位,因此,通过立法对债券持有人利益进行保护是维护稳定社会关系的必然要求.本文吸收了相关学者的研究成果,阐述了债券持有人内在的法律特征,结合我国债券市场发展的现状和存在的问题,提出了我国债券市场上债券持有人利益保护机制的立法建议.     

A property rights view of multi-unit franchising

This study develops a property rights explanation of the multi-unit (MU) ownership strategy of the franchise firm. According to the property rights theory, the allocation of residual rights of control (decision and ownership rights) in franchise firms depends on the contractibility of system-specific and local market assets (LMA). We develop and test the following hypotheses: Multi-unit franchising (MUF) is positively related to the franchisor’s intangible system-specific assets and negatively to the franchisee’s intangible LMA. In addition, we argue that impact of financial assets on the tendency toward MUF depends on the contractibility of LMA. Empirical results from the German franchise sector provide partial support of the hypotheses. Compared to the agency theory, which focuses on (complete) incentive contracts that specify residual income rights between the franchisor and franchisee, property rights theory focuses on incomplete contracts that allocate residual control rights between the franchisor and network partners. Furthermore, compared to the resource scarcity theory, property rights theory explains the impact of contractibility of resources/assets on the ownership strategy of the franchise firm.     

Should health authorities offer risk-sharing contracts to pharmaceutical firms? A theoretical approach

In this paper, we characterise the risk-sharing contracts that health authorities can design when they face a regulatory decision on drug pricing and reimbursement in a context of uncertainty. We focus on two types of contracts. On the one hand, the health authority can reimburse the firm for each treated patient regardless of health outcomes (non risk-sharing). Alternatively, the health authority can pay for the drug only when the patient is cured (risk-sharing contract). The optimal contract depends on the trade-off between the monitoring costs, the marginal production cost and the utility derived from treatment. A non-risk-sharing agreement will be preferred by the health authority, if patients who should not be treated impose a relatively low cost to the health system. When this cost is high, the health authority would prefer a risk-sharing agreement for relatively low monitoring costs.     

Health and Safety at Home: Private and Public Responsibility for Unsatisfactory Housing Conditions

This paper reviews two legislative approaches intended to control housing conditions in the rented sector - the landlords' contractual obligations, and the powers of local authorities. The authors argue that the landlords' covenants are almost totally ineffective, and that it now rests on local authorities to protect the health and safety of tenants. Breaches of the implied covenants that houses should be fit and in repair will provide tenants with a legal action against their landlords. However, the tenant's standing is now so weak that these covenants fail to provide protection. The Housing Act 2004 introduced a regulatory framework based upon assessing the risks to the health and safety - the Housing Health and Safety Rating System (HHSRS) - giving local authorities tools to ensure that housing is as safe and health as possible.
The history of the regulation of housing conditions also reveals important insights into the nature of private and public regulation.     

Origin Myths,Contracts, and the Hunt for Pari Passu

We use interviews with corporate lawyers and a data set of contracts to explore an elite area of legal practice: sovereign bond lending. Sovereign debt lawyers work at prestigious global law firms, yet the contracts they produce include some terms that defy explanation. Lawyers often account for the existence of these terms through origin myths. Focusing on one contract term, the pari passu clause, we explore two puzzling aspects of these myths. First, we demonstrate that the myths are inaccurate as to both the clause's origin and the role of lawyers in contract drafting. Second, the myths often are unflattering, inaccurately portraying lawyers as engaged in little more than rote copying. We probe this disjuncture between the myths and lawyers' actual practices and explore why contracts origin myths might hold such appeal for this elite segment of the bar.     

美国商业秘密法中的竞业禁止协议研究

竞业禁止协议已经成为现代社会美国企业保护商业秘密的有效途径。因美国学界及各州立法与司法实践对雇主商业秘密权以及雇员自由择业权的偏重不同，致使竞业禁止协议的效力在各州之间以及同一州的不同法院之间处于不确定状态，但大多数法院均在合理性原则的标准下判定其效力。     

民事合同与商事合同之辨

民事合同与商事合同在当事人认定、交易结构的繁简、"名""实"相副与否、"穿透"合同关系的允许与禁止、合同瑕疵的容忍抑或矫正、商业逻辑的地位及作用、坚守"正位"抑或"错位"处理"火候"把握等方面存在差异.认识、重视和研讨之,目的 和意义之一是,在法律适用时必须顾及商事合同的特殊性,不得僵硬地套用关于民事合同的规定.目的 ...     

Impact of university intellectual property policy on the performance of university-industry research collaboration

Despite the expectation of various advantages, university-industry research collaboration (UIC), a relationship between two different worlds, often faces serious conflicts. The performance of UIC depends on the research partners’ strategies and institutional designs through which they seek to mitigate these conflicts and increase partner incentives. We pay special attention to the role of the university intellectual property (IP) policy, formally introduced to Japan in 2003, as the basis of UIC contracts and empirically examine its impact on the performance of UIC projects, considering the factors in firms’ participation in UIC. We argue that the university IP policy that is equitable in sharing revenue and royalty from innovative outcomes and applied flexibly according to the partner’s needs may contribute to improving project performance by enhancing the commitment of firms, and we test our hypotheses using a sample of Japanese firms obtained from our original survey. The estimation results support the hypotheses, although the mediation via the firm’s commitment only partially explains the relationship between the university IP policy and UIC performance.     

Racially Restrictive Covenants—Were They Dignity Takings?

Racially restrictive covenants—subdivision rules or neighborhood agreements that “run with the land” to bar sales of rentals by minority members—were common and legally enforceable in the United States in the first half of the twentieth century. In spite of their demeaning character, these racial covenants took away opportunities from excluded minorities, rather than things, and thus they amounted to something less than the dramatic “dignity takings” that Bernadette Atuahene (2014) describes in her new book on dignity takings in South Africa. In this article, I explore some significant ways in which racially restrictive covenants differed from dignity takings as Atuahene defines them, as well as the shadowy similarities between racial covenants and Atuahene's dignity takings; I focus here on the dimensions of dehumanization, state involvement, and property takings. I conclude with a discussion of remedies, particularly considering measures that restore dignity through both public policies and private actions.     

论合同效力类型体系的重构*--认真对待合同的法律约束力

现有合同效力类型体系不够科学,有必要重构。合同的效力类型应划分为三类五种。合同有效（广义）包括依法成立的合同的有效（狭义）和可撤销合同的有效。合同效力待定实为法律约束力待定。合同无效（广义）包括合同绝对无效（狭义）和相对无效。此“三类五种体系”始终以合同的“法律约束力”为基点,与现有的以“生效”为基点的合同效力类型体系均截然有别。该体系还表明,合同有效乃生效的必要前提。应当承认合同有效乃介于合同成立与合同生效之间的独立的效力层次。     

Corruption and hold-up: the role of intermediaries

Corrupt contracts are illegal and, therefore, vulnerable to hold-up. That is, a bureaucrat who has accepted a bribe from a firm in exchange for a license may still choose not to grant the firm that license (hold-up). This paper develops a model to study the role that intermediaries play in preventing hold-up. There are two types of firms, good firms that are legally entitled to receive a license, and harmful firms that are not. Without intermediaries only good firms enter the market, and harmful firms do not enter because of hold-up. Intermediaries are legally permitted to help firms reduce their navigation costs of obtaining licenses. Thus, intermediaries increase entry of good firms. However, by utilizing the legal aspects of their transaction with good firms as leverage against the bureaucrat, intermediaries can prevent hold-up among harmful firms. Thus, intermediaries increase participation by both good and harmful firms and their welfare costs are ambiguous. Data obtained from occurrences of violations of the Foreign Corrupt Practices Act are broadly consistent with our model.     

For the Love of Darcie: Recognising the Human–Companion Animal Relationship in Housing Law and Policy

This paper identifies the law’s failure to recognise and protect the human–companion animal relationship in the housing arena. The nature of the human–companion animal relationship has striking similarities to human–human relationships in the socially supportive aspects of the relationship such as attachment, nurturance and reliable alliance. This contributes to the social life and sense of well-being of the owner. There is also evidence that the human–companion animal relationship can have physical health benefits such as lowering the risk of death by cardiovascular disease. It is clear that society benefits from the human–companion animal relationship, which many owners perceive as akin to family, in the form of healthier, less isolated people with better social networks. Yet in the key area of housing, the law does nothing to protect or even recognise this relationship. In consequence, every year thousands of tenants in both the public and private sector are faced with ‘no pet’ covenants in their leases and grapple with difficulties such as reduced housing options, higher rents or the traumatic decision to give up their companion animal for rehoming or euthanasia. This is especially prevalent amongst vulnerable people, like the elderly and mentally ill, who are more likely to need to move into supported accommodation. This article examines housing law in countries, such as France and Canada, that prohibit ‘no pet’ covenants in residential leases and provides arguments for the effective formulation and implementation of such law in the UK.     

You're not going to stop my work, mate

This case highlights potential problems associated with theenforceability of restrictive covenants, and highlights theneed for well-crafted and realistic covenants.