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An Introduction to the Law of Corporations: Cases and Materials, Fall 2017

Original author: Brian JM Quinn

This open-source casebook is the fifth edition of a casebook using the H2O platform of Harvard's Berkman Center. This casebook is intended to be used as the main casebook for an introductory course on the law of corporations. Because is subject to a Creative Commons license and can be printed via Amazon/CreateSpace, it is available to students at a very modest cost. Alternatively, students can read and access the cases and materials online via the H20 platform at https://opencasebook.org at no cost. This casebook and the H2O platform are part of an effort by educators to make high quality course materials and casebooks available to students at reasonable prices.

While the materials in this casebook start with the Delaware corporate code, we will start the class with an online course covering the basic concepts of Agency as well as an online course covering the basic concepts of Partnership. Case materials and resources for Agency and Partnership are embedded in the online courses. Students should plan to complete both of these courses, including the accompanying quizzes in Canvas, by the dates set forth in the syllabus. 

As you are working on the online courses, in class we will focus on the corporate form and the Delaware corporate code. While the various conceptual approaches to the corporate law are extremely interesting and important, it is critical that law students master the corporate code. Much of the work of the corporate lawyer starts with the code. As such, we will start with an in depth examination of the corporate code.  Although we could study the Model Code or the Massachusetts code, for most corporate lawyers, the Delaware corporate law will be central to their practice. Sixty percent of all publicly traded corporations are Delaware corporations. With respect to private corporations, they are typically incorporated in the state in which they are physically located, or they are incorporated in Delaware. Consequently, the Delaware corporate law is the closest to a lingua franca for US corporate law. 

Beyond the code, Delaware has a very deep corporate common law. It is in the corporate common law that the courts have developed the law of corporate fiduciary duties. It is through fiduciary duties that the corporate law attempts to regulate the relationship between stockholders and the corporation, between managers and the corporation, as well as the relationships of controlling stockholders and minority stockholders. Delaware's treatment of the corporate common law is so extensive that it is not uncommon at all for the courts of other states to refer to or cite Delaware corporate law cases when deciding questions involving their own corporate law. 

The fiduciary duties of corporate directors are tested most often in the context of corporate takeovers. The corporate takeover materials in this casebook attempt to highlight the most important issues in takeover situations as well as the court's doctrinal efforts to mitigate the transaction costs that arise in these situations.