ABSTRACT

This chapter explains why research into contract governance is of crucial importance in that area of tension between exchange and cooperation. Corporate governance provides a prime example for this innovation process of creative destruction. The main trigger was major financial and economic crisis, the so-called Asian flu, which mainly hit local emerging markets between 1997 and 1999 to an extent that was hitherto unknown. The recent crisis had much to do with governance, but corporate governance did not play a central role. The notion of contract governance was only used rather sporadically until recently, usually with a view to worker participation agreements in corporations, that is, in terms of corporate governance on a contractual basis. Contract governance will only be able to provide new solutions for preventing future systemic crises if this research approach can indeed offer useful innovations for legal scholarship. The contractual relationship between two persons, lateral privity of contract, represents the focus of classical contract law scholarship.