This course analyses the structure of a variety of complex contracts and transactions with both a positive and normative goal. We hope to learn more about the patterns of contractual governance that have emerged with respect to different types of transactions: How do parties order their commercial interactions? Perhaps more important, we hope to build on that learning to teach how parties may more effectively govern their business relations: How should parties order their commercial interactions?
The course is divided into two parts. The first, involving roughly half the semester, is designed to introduce the students to the economic and negotiating tools necessary to evaluate alternative transactional structures, including transaction costs, information economics, risk sharing and incentives, property rights, finance, and negotiation theory.
The second half of the course applies the tools developed in the first half to real transactions. The class is divided into five teams, each of which will be assigned a different complex real world transaction, and will be given a full set of the transaction documents. Each transaction is allocated two classes. For the first class, a student team prepares readings that include the actual transaction documents, an overview of the legal and regulatory character of the industry, and a description of the competitive characteristics of the industry. The student team presents their transaction during the first class. In the second class, the lawyers and/or clients who actually participated in the transaction make a presentation. The point is to give students the opportunity to test how the class approach corresponds to the way those who "did the deal" understood it. In prior offerings, the "deals" covered included a movie financing, the securitization of U.S. long distance telephone receivables by a Mexican telephone company, the acquisition of Northwest Airways, a venture capital financing transaction, and the project financing of large power facilities, both in the U.S. and abroad.