Two approaches contract to governance, the vested approach (developed by Nobel Prize winner Oliver Hart)

and the managerial approach developed by Lisa Bernstein and Brad Peterson.

1. Do you think that guiding vested-type principles are desirable? Why or Why not?

2. Do you think they should be included in the contract so that they are legally enforceable? Why or

Why not? Do you think they should be included in the preamble to the contract so they are not enforceable? Why or Why not? Or, do you think they should be avoided altogether?

3. List 2 transaction types where you think vested (enforceable or unenforceable, the choice is up to you) could help?

4. List two transaction types where you think it would not help or would make things worse if the principles were enforceable or the principles were included but unenforceable.

5. Three examples of managerial provisions (at least one must be from a contract for the sale of goods) other than those mentioned in the reading (so you must do the reading) and excluding arbitration provisions. How does it create value for the contracting parties?