Abstract
It is no secret that equity is a central part of corporate law. Yet a fuller appreciation of what equity means for corporate law is still lacking. This Article offers a new account of corporate law’s equity, showing that it is a kind of meta-law—or law about law—that operates ex post to address polycentric problems, conflicting rights, and opportunism. As we argue, much of the structure of corporate law—its architecture—is explained by the need for a robust equity that can intervene where needed, while also avoiding the dangers of unconstrained judicial discretion. Corporate law maintains a careful balance, one that constantly updates, to avoid both pitfalls. Efforts to strike that balance explain various features of corporate law, including fiduciary duties, the business judgment rule, derivative litigation, the doctrine of independent legal significance, different standards of review, and even the way corporate law has changed. As we will show, this account also offers something importantly different from conventional theories of corporate law, such as the nexus of contracts approach. Focusing on the equity in corporate law gives us a distinctive picture of both corporate law and its evolution.
Recommended Citation
Andrew S. Gold & Henry E. Smith,
The Equity in Corporate Law,
100
Notre Dame L. Rev.
789
().
Available at:
https://scholarship.law.nd.edu/ndlr/vol100/iss2/6
