Principal (commercial law)

About: Principal (commercial law) is a research topic. Over the lifetime, 1579 publications have been published within this topic receiving 35379 citations. The topic is also known as: Principal (commercial law).

The Law of Cyber-Attack

Abstract: Iran’s nuclear program grinds to a halt, the subject of a sophisticated computer attack that sent centrifuges spinning wildly out of control. A “distributed denial of service” attack takes the entire population of Burma offline immediately before the country’s first national election in twenty years. China’s military mounts an attack on a Falun Gong Web site based in Alabama. What law regulates these “cyber-attacks”? Does the law of war apply? If not, what other bodies of law might help address the problem? This Article examines these questions and, in the process, offers new insights into how existing law may be applied—and adapted and amended—to meet the distinctive challenge posed by cyber-attacks. It does so in two principal ways. First, the Article clarifies what cyber-attacks are and how they relate to existing bodies of law, including the law of war, recent international efforts to directly regulate cyber-attacks, international bodies of law that may be used to indirectly regulate cyber-attacks, and domestic criminal law. Second, the Article shows how existing law is deficient and what needs to be done to improve it. Although existing bodies of law do offer some tools for responding to cyber-attacks, these tools are far from complete or adequate. The law of war, for example, provides a useful legal framework for only the very small slice of cyber-attacks that amount to an armed attack or that take place in the context of an ongoing armed conflict. Other existing legal frameworks—both domestic and international—offer equally fragmentary assistance in addressing cyberattacks through law. Examining existing law leads to a clear conclusion: A new, comprehensive legal framework is needed to address cyber-attacks. That framework includes a more robust system of domestic enforcement, but a truly effective solution to this global challenge will require global cooperation. This Article thus outlines the key elements of a cyber-treaty that would provide a more comprehensive solution to the emerging threat of cyber-attacks.

Beyond Marbury: The Executive's Power to Say What the Law is

Abstract: Under Marbury v. Madison, it is emphatically the province and duty of the judicial department to say what the law is. But as a matter of actual practice, statements about what the law is are often made by the executive department, not the judiciary. In the last quarter-century, the Supreme Court has legitimated the executive's power of interpretation, above all in Chevron v. Natural Resources Defense Council, the most-cited case in modern public law. Chevron reflects a salutary appreciation of the fact that the executive is in the best position to make the judgments of policy and principle on which resolution of statutory ambiguities often depends. But the theory that underlies Chevron remains poorly understood, and in the last two decades, significant efforts have been made to limit the executive's interpretive authority. In general, these efforts should be resisted. The principal qualification involves certain sensitive issues, most importantly those involving constitutional rights. When such matters are involved, Congress should be required to speak unambiguously; executive interpretation of statutory ambiguities is not sufficient.

Low Balling, Legal Liability and Auditor Independence

Abstract: We construct a dynamic multi-agent moral hazard model to analyze the interactions among the firm owner, the manager and the auditor. Moral hazard may arise in hierarchical agency because a rational monitoring agent may accept a side payment from the monitored agent for misrepresenting information to the principal. This multi-agent moral hazard problem is the essence of the concern for auditor independence. We show that a ?low-balling? compensation scheme and the auditor's legal liability constitute an efficient dynamic contracting mechanism for hierarchical agency. In particular, low balling serves as a substitute for legal liabilities for maintaining auditor independence. Low balling reduces the transaction costs associated with the audit engagement relative to the flat-fee structure and can actually improve auditor independence.

The Anatomy of Corporate Law: A Comparative and Functional Approach

Abstract: This is the long-awaited second edition of this highly regarded comparative overview of corporate law. This edition has been comprehensively updated to reflect profound changes in corporate law. It now includes consideration of additional matters such as the highly topical issue of enforcement in corporate law, and explores the continued convergence of corporate law across jurisdictions. The authors start from the premise that corporate (or company) law across jurisdictions addresses the same three basic agency problems: (1) the opportunism of managers vis-a-vis shareholders; (2) the opportunism of controlling shareholders vis-a-vis minority shareholders; and (3) the opportunism of shareholders as a class vis-a-vis other corporate constituencies, such as corporate creditors and employees. Every jurisdiction must address these problems in a variety of contexts, framed by the corporation's internal dynamics and its interactions with the product, labor, capital, and takeover markets. The authors' central claim, however, is that corporate (or company) forms are fundamentally similar and that, to a surprising degree, jurisdictions pick from among the same handful of legal strategies to address the three basic agency issues. This book explains in detail how (and why) the principal European jurisdictions, Japan, and the United States sometimes select identical legal strategies to address a given corporate law problem, and sometimes make divergent choices. After an introductory discussion of agency issues and legal strategies, the book addresses the basic governance structure of the corporation, including the powers of the board of directors and the shareholders meeting. It proceeds to creditor protection measures, related-party transactions, and fundamental corporate actions such as mergers and charter amendments. Finally, it concludes with an examination of friendly acquisitions, hostile takeovers, and the regulation of the capital markets. Contributors to this volume - Hansmann and Kraakman Hansmann and Kraakman Hansmann and Kraakman Hertig and Kanda Hertig and Kanda Rock, Kanda, and Kraakman Davies and Hopt Hertig, Kraakman and Rock Hertig, Hansmann, Kraakman, Rock, Hopt and Kanda Hertig, Hansmann, Kraakman, Rock, Hopt and Kanda Davies, Hertig and Hopt

Incentive Contracting under Limited Liability

Abstract: We examine the nature of incentive schemes between the principal and the risk-neutral agent in the presence of the agent's limited liability and ex ante action choice. We consider alternative schemes when a simple rental contract is infeasible due to the limited liability of the agent and study the effectiveness of a performance bonus scheme in achieving the first-best outcome. We also discuss some implications of such schemes in real practices.