Abstract

This article deals with legal corporate behavior and corporate structures. It discusses the activity within and between business units. It explains studies on corporate behavior in a threefold order—the first order deals with the gap between formal legal contracts and informal corporate covenants; the second order deals with norms that govern alternative contractual norms; and the third order exclusively deals with the economic aspects of the study. The legal-economic approach tries to identify the gap between actual behavior and ideal behavior. This article demonstrates that investors are claimed to be non-interventionist and only the investor's direct involvement necessitates direct monitoring. It examines new arenas of contract practice such as Internet shopping and e-commerce more generally.