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Lawyers asleep at the wheel? The GM–Fisher Body contract

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  • Victor P. Goldberg

Abstract

In the analysis of vertical integration by contract versus ownership, one event has dominated the discussion—General Motors’ (GM) merger with Fisher Body in 1926. The debates have all been premised on the assumption that the 10-year contract between the parties signed in 1919 was a legally enforceable agreement. However, it was not. Because Fisher's promise was illusory the contract lacked consideration. This note suggests that GM's counsel must have known this. It raises a significant question in transactional engineering: what is the function of an agreement that is not legally enforceable? Copyright 2008 , Oxford University Press.

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  • Victor P. Goldberg, 2008. "Lawyers asleep at the wheel? The GM–Fisher Body contract," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(5), pages 1071-1084, October.
    • Handle: RePEc:oup:indcch:v:17:y:2008:i:5:p:1071-1084
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    File URL: http://hdl.handle.net/10.1093/icc/dtn030
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    Cited by:

    1. Hideshi Itoh, 2023. "What do contracts do to facilitate relationships?," The Japanese Economic Review, Springer, vol. 74(3), pages 333-354, July.
    2. Victor P. Goldberg, 2013. "Contracts: coordination across firm boundaries," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 5, Edward Elgar Publishing.
    3. Michael E. Sykuta, 2010. "Ronald H. Coase," Chapters, in: Peter G. Klein & Michael E. Sykuta (ed.), The Elgar Companion to Transaction Cost Economics, chapter 4, Edward Elgar Publishing.
    4. Paul Walker, 2010. "The (Non)Theory Of The Knowledge Firm," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(1), pages 1-32, February.

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