This chapter chronicles an unnoticed aspect of the intellectual history of the “contractarian” paradigm, the descriptive claim that firms are best characterized as nexus of contracts. Although the paradigm’s rise in the 1980s in the corporate world is well known, little has been said about its success in rewriting both theory and doctrine in charitable and not-for-profit law. The contract paradigm has reshaped the questions that not-for-profit scholarship attempts to answers, and it is tightly linked to developments in not-for-profit doctrine and practice. Key examples include the growth of donor standing—the notion that not-for-profits have a fiduciary duty to their donors, and that donors may bring suit for breaches—and the growing obsession with “donor intent” throughout the not-for-profit sphere. I contrast contractarianism with an institutionalist “public trust” conception of charities, which was the prevailing intellectual paradigm for most of the 20th century.

This introduction traces aspects of the history of fiduciary duties in business law and scholarship. Despite fiduciary law’s centrality to business law, the chapter describes how the contractarian revolution of the 1980s contributed to the marginalization of fiduciary duties, both in theory and doctrine. However, subsequent developments, both in case law and in scholarship, have questioned some of the core assumptions of the early wave of contractarian theory. The introduction outlines three critiques that scholars have levied against the early contractarians’ view of fiduciary duties, and connects these critiques to the eighteen chapters in the volume. The introduction also provides a roadmap of our contributors’ arguments.

This chapter details how competition laws have, to date, addressed matters associated with interoperability standards and SEIP. Particular focus is given the essential facilities doctrine. In the United States, the essential facilities doctrine has been abandoned; in the EU, refusal to licence can constitute an abuse of a dominant market position in the relatively narrow circumstances outlined in the ‘exceptional circumstances’ test applied in the Magill and IMS Health cases. Consideration is also given to the law and economics analysis of the relevant laws and practices. It is concluded that the essential facilities doctrine, as applied to interoperability standards and SEIP, would not provide a helpful basis for binding disciplines at the international level because of entrenched differences between leading jurisdictions, as well as its questionable standing in the context of law and economics scholarship. The work also includes discussion and analysis of other applicable principles of competition law in the context of interoperability standards, including concerted practices, fraud or misconduct in the creation of standards, tying, and the somewhat controversial doctrine of excessive pricing.

Decentralization of the energy sector means the breaking-up of the sector and its vertically integrated enterprises and/or global cartels by separating its distinct functions (extraction, transmission and sale), thereby allowing for increased competition in the market. This chapter uses two case studies to illustrate the challenges the decentralization of largely vertically integrated energy markets poses for international trade law, including international trade law’s inability to deal comprehensively with the production quota practices of global energy cartels such as the Organization of Petroleum Exporting Countries (OPEC). The chapter then studies regional energy market decentralization policies (in this case the European internal market), focusing on the panel report in EU – Energy Package, and considers which WTO rules facilitate such policies and which constrain them.

Over the past few decades, scholars in a variety of fields – economics, psychology, sociology, anthropology, and international relations, among others – have made enormous strides studying the behavioral roots of international law by exploring individual motivations, describing organizational cultures, and mapping communities of practice. Taken together, the work of these scholars presents a complex, nuanced understanding of how international law works. However, these projects are rarely considered together and are generally separated by academic enclosures and focused on different subfields within international law, thereby unfortunately restricting communication among scholars who are using different methodologies. The goal of this book is to break down some of these barriers and provide a glimpse of what an international law more focused on behavior and more engaged with these other fields might look like; this chapter aims to provide a roadmap in this effort by describing international law’s long interest in behavior and the past attempts to explore that relationship, exploring the book’s approach and laying out the contributions in each chapter, and beginning the process of bringing these insights together and outlining a series of takeaways for future study of international law as behavior.

This chapter provides an introduction to the basic structure and themes of the book. We begin with a description of the basic features of a corporation. We then discuss the intellectual foundations of corporate governance, including an overview of the doctrine of shareholder primacy and the view that a corporation is merely a nexus of contracts. We begin to catalog some of the cracks in these foundations, focusing on the shortcomings of the long-standing arguments for the exclusive shareholder franchise. Next, we make clear that our the criticisms of shareholder primacy and the exclusive shareholder franchise do not question, but indeed make extensive use of, the basic principles of standard economics and social choice theory. In other words, both our critique and our positive theory come from within the very tradition that gave rise to the original arguments for shareholder control. We conclude the chapter with a detailed plan for the rest of the book.

Judge Richard Posner’s opinion in McCarty v. Pheasant Run, Inc. exemplifies his use of a law and economics approach in tort cases. Applying the famous risk–utility test found in the “Hand formula,” Posner refused to impose negligence liability on a hotel in a case in which a woman was assaulted by an unknown assailant who gained access to her room through an unlocked door that opened into a courtyard. The rewritten feminist dissent objects to the use of the risk–utility test in sexual violence cases where the “loss” being quantified (i.e., a deprivation of personal autonomy) is often undervalued and misunderstood. To eliminate the risk of victim-blaming, the feminist opinion would change the law to disallow a contributory negligence defense to limit a plaintiff’s recovery in cases of rape and sexual assault. The accompanying commentary discusses how Judge Posner’s rhetoric and his law and economic philosophy leads him to weigh the economic interests of businesses over women’s physical and emotional well-being.

Chapter 9 includes some insights and observations from the Hon. Prof. Calabresi on the major elements of the Maimonidean theory, especially those that are similar – more or less – to contemporary tort law and economics. Calabresi discusses law, economics, and justice in our era and in Maimonides’ theory of torts, and empirical differences in the different times and their implications. Calabresi also considers the question of whether there are differences between the differential liability model presented by Maimonides, and contemporary theories of the economic analysis of tort law, expanding on deontological as opposed to utilitarian considerations according to law and economics. Calabresi deals specifically with the issue of punitive damages and discusses the innovative analysis of Maimonides compared to the multiplier approach, distributive justice as presented by Maimonides, and his optimal deterrence model. There is a great deal in Maimonides that presaged both his work in particular and sophisticated modern law and economics generally. Calabresi notes that not only can we now understand Maimonides, and the breadth of his thinking better, but we also have a clearer picture of the strengths and weaknesses of modern scholarship.

Chapter 1 is devoted to a brief description of the major milestones of contemporary and Jewish/talmudic torts. This description serves as an initial presentation of the place of torts in the private arena of law vis-à-vis other fields. We start with a presentation of Jewish law of torts in general and in Maimonides’ writings. There were attempts to base tort liability in the talmudic legal tradition solely on a fault-based liability theory of peshiah (negligence), but these attempts encountered difficulties. We further present the goals of torts according to contemporary tort theories. We introduce monistic vs. pluralistic approaches, those approaches that focus only on one goal (such as optimal deterrence, distributive justice, and corrective justice) as opposed to mixed-pluralistic approaches that integrate two or more goals. Next, we move on to deal with the standard of care and present the full range of tort liability regimes, starting from strict liability and ending in fault-based liability. We also present the book’s method. The interdisciplinary character of the book requires the use of various methods, such as those of comparative law, legal history, law and religion, Judaic studies, legal theory, and economic analysis of law.

Chapter 5 will examine consequentialist elements in Maimonides’ tort theory, based primarily on what he wrote in the Guide. We will see that although Maimonides’ theory is not consequentialist in the full sense of this term, several significant elements of consequentialism are found in his theory, notwithstanding the concurrent presence of other important elements. We also saw that Maimonides’ general approach to the objectives of tort law, mainly as emerges from the Guide, reveals an extremely important consequentialist objective – prevention of acts causing damage and deterrence. After a discussion of this important aspect of Maimonides’ tort theory, we will proceed to a comparative examination of the similarities and the differences between this theory and the modern theories of law and economics regarding torts, including the theories of some of the fathers of the economic analysis of law in general and of tort law in particular – Calabresi and Posner. We also present a certain proximity between the consequentialist approach of Maimonides and the modern approaches to punitive damages. We saw a certain similarity between his approach and the economic multiplier approach, but in our view, there is also similarity to the moral idea of societal redress in extracompensatory damages.

Standing in the way of sustainable business efforts is the belief that corporate fiduciaries must work to maximize shareholder wealth at all costs. American corporate law in fact imposes no such obligation, yet shareholder wealth maximization remains a powerful social norm. This chapter explores the history of the shareholder primacy norm, tracing the idea from its inception, to its famous articulation in the classic case of Dodge v. Ford, through the influence of the law and economics movement and the rise of financialism at the end of the last century. The chapter then examines the current debate over shareholder primacy, sustainability, and corporate social responsibility, arguing that shareholder primacy has peaked in the United States and is meeting resistance internationally. A new norm of enlightened stakeholderism, I argue, is on the rise, pursuant to which firms aim to be not just profitable but environmentally and socially responsible, as well.