The Uncorporation and Corporate Indeterminacy

William Carney and George Shepherd argue that Delaware’s suc-cess in corporate law is a “mystery” when one considers the high trans-action costs engendered by the indeterminacy and instability of Delaware law. In this Article, Larry Ribstein shows that the mystery is clarified by analyzing Delaware law in “uncorporate” cases—that is, limited part-nerships and limited liability companies. In this setting, parties can rely on specific contractual incentive and disciplinary devices rather than on open-ended fiduciary duties. Delaware lawmakers provide substantial coherence by focusing on the parties’ contracts. It follows that the prob-lems of Delaware law are mainly a function of the corporation rather than of Delaware lawmakers.

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