Business Law Prof Blog

Why Haven’t Conservative States Tried to Roll Back State Securities Laws?

Federal and state securities regulation is the personification of what conservatives refer to pejoratively as “big government.” Businesses can’t raise money unless they first get permission from the government and, in many states, that permission turns on a regulator’s determination of whether the offer is fair. The cost of compliance is a serious drag on capital formation, especially small business capital formation. Federal and state securities laws also generate a tremendous amount of plaintiff’s litigation, another conservative bugaboo.

We’ve seen conservative efforts at the federal level to limit securities regulation and litigation—for example, the Private Securities Litigation Reform Act and the JOBS Act. But, unless things are going on at the state level that I’m not aware of, there doesn’t seem to be a corresponding effort at the state level.

That’s surprising, because the Republicans have greater control at the state level than they do at the federal level. There are 31 Republican governors and the Republicans control both chambers of the state legislature in 30 states, plus Nebraska’s unicameral legislature. Republicans control both the governorship and the state legislature in 24 states.

Why hasn’t there been a push to change state securities regulation? Are Republicans satisfied with state regulation? If so, that’s surprising because Rutheford Campbell and others have pointed to state securities regulation as a major drag on small business capital formation. Are politicians at the state level not as anti-government? Or is there something else going on that I’m missing?

I’m not arguing that state securities laws should be limited (at least, not in this post). I’m just curious why it hasn’t happened.

ICYMI: Tweets From the Week (Feb. 28, 2016)

"Public Benefit Corporation may ... have narrowed flexibility [to] ... alter the shareholder primacy norm" https://t.co/ffJ41XhgFw #corpgov

— Stefan Padfield (@ProfPadfield) February 23, 2016

Did Wall Street elites make a fortune by leading "3 most destructive financial fraud epidemics in history"? https://t.co/UpSnKIIorz #corpgov

— Stefan Padfield (@ProfPadfield) February 23, 2016

"where does responsibility for harm go if it can’t affix itself to the web of economic actors that profit" https://t.co/zZB6e4B6i4 #corpgov

— Stefan Padfield (@ProfPadfield) February 23, 2016

"Besides breaking up the banks & regulating them like public utilities...Kashkari wants to tax...leverage" https://t.co/Y4r3mRO6cR #corpgov

— Stefan Padfield (@ProfPadfield) February 24, 2016

"The Year in Social Enterprise: 2015 Legislative and Policy Review" https://t.co/zhHbE1ikuV #corpgov #socent

— Stefan Padfield (@ProfPadfield) February 27, 2016

Movie Blogging Again

I generally try to catch pop cultural representations of securities law/business law issues; though I haven't yet had a chance to see Billions, I did recently watch Madoff and 99 Homes.  So, my thoughts under the jump:

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Bruckner on Bankrupting Higher Education

Matthew Bruckner (Howard) recently posted an interesting article on bankruptcy reorganization and universities. Given the challenges facing many schools, his article should be one that attracts attention. The article can be downloaded here and the abstract is below.

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Many colleges and universities are in financial distress but lack an essential tool for responding to financial distress used by for-profit businesses: bankruptcy reorganization. This Article makes two primary contributions to the nascent literature on college bankruptcies by, first, unpacking the differences among the three primary governance structures of institutions of higher education, and, second, by considering the implications of those differences for determining whether and under what circumstances institutions of higher education should be allowed to reorganize in bankruptcy. This Article concludes that bankruptcy reorganization is the most necessary for for-profit colleges and least necessary for public colleges, but ultimately concludes that all colleges be allowed to reorganize in chapter 11.

Call for Student Papers: NAWL 2015 Selma Moidel Smith Competition

The mission of the National Association of Women Lawyers (NAWL) is to provide leadership, a collective voice, and essential resources to advance women in the legal profession and advocate for the equality of women under the law. Since 1899, NAWL has been empowering women in the legal profession, cultivating a diverse membership dedicated to equality, mutual support, and collective success. NAWL has established the annual Selma Moidel Smith Law Student Writing Competition to encourage and reward original law student writing on issues concerning women and the law.

The rules for the competition are as follows:

Entrants should submit a paper on an issue concerning women’s rights or the status of women in the law.

Essays will be accepted from students enrolled at any law school during the 2015-16 school year. The essays must be the law student author’s own work and must not have been submitted for publication elsewhere. Papers written by students for coursework or independent study during the summer, fall, or spring semesters are eligible for submission. Notwithstanding the foregoing, students may incorporate professorial feedback as part of a course requirement or supervised writing project.

FORMAT: Essays must be double-spaced in 12-point, Times New Roman font. All margins must be one inch. Entries must not exceed fifteen (15) pages of text, excluding notes, with footnotes placed as endnotes. Citation style should conform to The Bluebook – A Uniform System of Citation. Essays longer than 15 pages of text, excluding notes, or that are not in the required format will not be read.

JUDGING: NAWL Women Lawyers Journal^® designees will judge the competition. Essays will be judged based upon content, exhaustiveness of research, originality, writing style, and timeliness.

QUESTIONS: Questions regarding this competition should be addressed to the chair of the Writing Competition, Professor Jennifer Martin at [email protected].

SUBMISSION AND DEADLINE: Entries must be received by May 1, 2016. Entries received after the deadline will be considered only at the discretion of NAWL. Entries must provide a cover letter providing the title of the essay, school affiliation, email address, phone number, and mailing address. Entries must be submitted in the following format: email an electronic version (in Microsoft Word) to [email protected].

AWARD: The author of the winning essay will receive a cash prize of $500. NAWL will also publish the winning essay in the Women Lawyers Journal. The most recent winning paper was “The Practice of Name Suppression: How the News Media Promotes the Stigmatization of Rape Victims” written by Emily Suran, University of Michigan Law School. Please view paper at http://www.nawl.org/p/cm/ld/fid=83.

Mandatory Attendance at Campus Talks?

A few weeks ago, I had the privilege of attending a luncheon talk by Anne Anderson, Ireland's Ambassador to the United States. Ambassador Anderson covered a range of topics, including Ireland's place in and commitment to the EU, the financial and political situation in the EU, and Ireland's success in attracting international businesses. 

At Belmont, we require our undergraduate students to attend 60 hours worth of campus talks/presentations/workshops over their four years. When I first heard about this requirement, I must admit that I thought it a bit paternalistic. But looking back on my college experience, I do wish I would have been nudged (or even required) to attend more of the wonderful talks that took place on campus. To be clear, our students get to choose which talks they attend and there are many options. 

While I have come around on these requirements for undergraduates, I am not sure if I would require campus talk attendance of law students -- to my knowledge we don't. Given that graduate students are, or should be, more mature, I don't think I would require them to attend campus talks, but I might give them some sort of certificate if they attended a certain number.

Somewhat similarly, when I was in law school, my school started a pro bono recognition program. Basically, you received one of three levels of "pro bono recognition" depending on the number of pro bono hours you worked for external public interest organizations. The results of this small recognition program were impressive; only 1 of my 10-15 closest friends was doing pro bono work before the program, but about 80% of us were doing pro bono work afterward. This is admittedly a small sample, but the program seemed to impact the entire school. 

That said, maybe by graduate school we should try to teach students to do things for their own sake, and not merely for recognition.  

Binging on Billions

Next week is our Spring Break and I plan to catch up on some television and movie watching. Many of my former business associations students have raved about the show Billions, described online as follows:

Wealth, influence and corruption collide in this drama set in New York. Shrewd U.S. Attorney Chuck Rhoades is embroiled in a high-stakes game of predator vs. prey with the ambitious hedge-fund king, Bobby Axelrod. To date, Rhoades has never lost an insider trading case -- he's 81-0 -- but when criminal evidence turns up against Axelrod, he proceeds cautiously in building the case against Axelrod, who employs Rhoades' wife, psychiatrist Wendy, as a performance coach for his company. Wendy, who has been in her position longer than Chuck has been in his, refuses to give up her career for her husband's legal crusade against Axelrod. Both men use their intelligence, power and influence to outmaneuver the other in this battle over billions.

Now that my students are watching it, I feel compelled to do so as well, and not just because Australian papers play up the copious amounts of money and sex depicted in the series. I’m glad that my students are watching any television show that deals with the financial industry but even more gratified that they are emailing me telling me that now they understand some of the concepts that they see in this show and others such as HBO’s Silicon Valley.

Are there any other television shows or movies I should catch up on during Spring Break in between grading, writing, and watching Suits (for my Civil Procedure students)? I like to keep up with what my students watch because I use some of the story lines for in class hypos and exam questions. I also ask students to write reflection papers applying what they have learned in class and analyzing what Hollywood got wrong. I look forward to your suggestions.

On Describing The Limited Liability Partnership . . . .

Our Kentucky "brother," Tom Rutledge, sent me a link to a super blog post yesterday on Mortgage Grader Inc. v. Ward & Olivo, a limited liability partnership case currently before the New Jersey Supreme Court.  Tom's focus in his post was the limited liability aspect of the case, which is fascinating--and more than a bit unsettling for those practicing in jurisdictions like New Jersey and Kentucky that require law firms organizing limited liability partnerships to maintain malpractice insurance.  The question before the court: whether, in the absence of an express provision in the partnership statute, the failure of a law firm organized as a limited liability partnership to maintain required malpractice insurance results in the loss of the partnership's limited liability status.  The trial court ruled that the lapse of malpractice insurance caused a loss of limited liability status; the appeals court reversed.

But Tom also mentions another aspect of the case in his post that I want to call out here.  Specifically, he notes references in the appellate court opinion to the conversion of a partnership to a limited liability partnership.  Here's what he says on that point:

One potentially disturbing aspect of the language used by the Court of Appeals and in the oral argument is the notion that the loss of LLP status and the treatment of the firm as a general partnership is some sort of conversion. But it isn’t. An LLP is a general partnership that has elected into a special status – it is still a general partnership but for the rule of partner limited liability. . . .

This comment reminded me of co-blogger Josh Fershee's super-helpful obsession (maybe too strong a word?) with "limited liability corporation" as an incorrect judicial (and other) descriptor of the limited liability company business form.  (See, e.g., his December 2015 post here.)  And far be it from me to disagree with either of these guys in making their respective points about these labeling inaccuracies!  

As a separate point, I want to call out the fact that this area of partnership law can be important both for bar examinations (thinking of all those folks suffering through that test this week . . .) and IRL.  In fact, I was asked a question recently about the Tennessee provision on limited liability elections by a BARBRI student.  (Little-known fact: I teach the Tennessee BARBRI segments on agency, unincorporated entities, and personal property.)  The student's question did not inappropriately refer to a conversion of a partnership into a limited liability partnership, but it did point out several differences in Tennessee law in this area that I want to mention.

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2016 Proxy Season Corporate Governance Watch List & Additional Resources

Having just taught a corporate governance seminar class on the proxy process (from a company's perspective), proxy advisory services, and institutional voting, I have the upcoming proxy season on my mind.  There are a great collection of resources available for those interested for academic or practice-related reasons.  My students found many of these summaries to be a good distillation of the issues and introduction to the nuts and bolts of proxy access.  I have provided my list of resources below, in addition to a quick summary of the major governance issues likely to be on the table in 2016.

Major Governance Issues:

• Dodd Frank pay ratio disclosure
• Say on Pay majority voting
• Executive compensation disclosures subject to new SEC interpretations
• Proxy Access Bylaws (see New York campaign)
• Cybersecurity 
• Audit Committee Disclosures
• Independent Chair proposals

2016 Proxy Season Resources:

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Guest Post: Why NFL Players Might Want the NFL to Win Its Appeal of Brady v. NFL

Following is a guest post from by J. Scott Colesanti and Madeline Rasmussen. Scott is a former contributing editor to this Blog, and I am happy to share the post post below.  This is sports and labor law post, to be sure, but employment issues, especially big time sports-related ones, are business law, too.  

Why NFL Players Might Want the NFL to Win Its Appeal of Brady v. NFL

by J. Scott Colesanti and Madeline Rasmussen

It feels like weeks since we saw a meaningful NFL contest (well, actually it has been a little over a week).  But it is nonetheless still weeks until the Brady appeal before the Second Circuit in March.  Should the vacatur of the superstar’s 4-game suspension in “Deflategate” be upheld, alternative means of both implementing and reviewing NFL punishment seem likely, alternatives none too comforting for future disciplined football players.

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Stephen Bainbridge asks

"Why don't conservative activists use SEC Rule 14a-8 (the so-called shareholder proposal rule) to put proposals on corporate proxy statements?" and speculates that to the extent conservatives do submit such proposals, they are likely to be excluded as ordinary business matters.

Well, I don't know if this represents a new trend or anything, but at least one conservative group was recently successful under 14a-8.  The National Center for Public Policy Research submitted a proposal to have Deere & Co provide a yearly report to stockholders on whether its political spending was in line with the company's stated values.  According to the proposal, Deere & Co has stated that it advocates for a free marketplace, and that it only supports candidates who share its "pro-business" outlook and commitment to "free enterprise," but at the same time, it has joined the Climate Action Partnership, withdrawn its support for the conservative ALEC, and has donated to politicians who voted for the Affordable Care Act and Dodd-Frank.  The proposal asks that the Board develop a policy for ensuring congruency between the company's corporate values and its political activity, and report to shareholders on the company's compliance with that policy.

The SEC denied Deere & Co's request for no-action relief in December, and the proposal has been included in the corporate proxy for Wednesday's shareholder meeting.

Walch on Bitcoin Blockchain as Financial Market Infrastructure

I was fortunate to hear Angela Walch (St. Mary's) present on this paper at SEALS last summer. Her article, The Bitcoin Blockchain as Financial Market Infrastructure: A Consideration of Operational Risk, has now been published in the NYU Journal of Legislation and Public Policy and is available on SSRN. The abstract is reproduced below:

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“Blockchain” is the word on the street these days, with every significant financial institution, from Goldman Sachs to Nasdaq, experimenting with this new technology. Many say that this remarkable innovation could radically transform our financial system, eliminating the costs and inefficiencies that plague our existing financial infrastructures, such as payment, settlement, and clearing systems. Venture capital investments are pouring into blockchain startups, which are scrambling to disrupt the “quadrillion” dollar markets represented by existing financial market infrastructures. A debate rages over whether public, “permissionless” blockchains (like Bitcoin’s) or private, “permissioned” blockchains (like those being designed at many large banks) are more desirable.

Amidst this flurry of innovation and investment, this paper enquires into the suitability of the Bitcoin blockchain to serve as the backbone of financial market infrastructure, and evaluates whether it is robust enough to serve as the foundation of major payment, settlement, clearing, or trading systems.

Positing a scenario in which the Bitcoin blockchain does serve as the technology enabling significant financial market infrastructures, this paper highlights the vital importance of functioning financial market infrastructure to global financial stability, and describes relevant principles that global financial regulators have adopted to help maintain this stability, focusing particularly on governance, risk management, and operational risk.

The paper then moves to explicate the operational risks generated by the most fundamental features of Bitcoin: its status as decentralized, open-source software. Illuminating the inevitable operational risks of software, such as its vulnerability to bugs and hacking (as well as Bitcoin’s unique 51% Attack vulnerability), uneven adoption of new releases, and its opaque nature to all except coders, the paper argues that these technology risks are exacerbated by the governance risks generated by Bitcoin’s ambiguous governance structure. The paper then teases out the operational risks spawned by decentralized, open-source governance, including that no one is responsible for resolving a crisis with the software; no one can legitimately serve as “the voice” of the software; code maintenance and repair may be delayed or imperfect because not enough time is devoted to the code by volunteer software developers (or, if the coders are paid by private companies, the code development may be influenced by conflicts of interest); consensus on important changes to the code may be difficult or impossible to achieve, leading to splits in the blockchain; and the software developers who “run” the Bitcoin blockchain seem to have backgrounds in software coding rather than in policy-making or risk-management for financial market infrastructure.

The paper concludes that these operational risks, generated by Bitcoin’s most fundamental, presumably inalterable, structures, significantly undermine the Bitcoin blockchain’s suitability to serve as financial market infrastructure.

Exam Drafting Tips from Professor Steve Bainbridge

Some good exam drafting tips from Professor Steve Bainbridge (UCLA) available here.

University of Cincinnati College of Law │ The 29th Annual Corporate Law Center Symposium │Corporate Social Responsibility and the Modern Enterprise │ Cincinnati, OH │ March 18, 2016

I am looking forward to presenting at this conference next month. Looks like a great group of academics and practitioners.

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University of Cincinnati College of Law

The 29th Annual Corporate Law Center Symposium - Corporate Social Responsibility and the Modern Enterprise

March 18, 2016

8:45 a.m. – 3:30 p.m.

Hilton Netherland Plaza

Pavilion Ballroom

 

This event is free. CLE: 5.0 hours, pending approval.

Presented by the University of Cincinnati College of Law’s Corporate Law Center and Law Review.

Symposium materials will be available on March 14 at: law.uc.edu/corporate-law-center/2016-symposium

Please register by contacting Lori Strait: email [email protected]; fax 513-556-1236; or phone 513-556-0117

 

Introduction, 8:45 a.m.

Keynote, 9:00 a.m.

Clare Iery, The Procter & Gamble Company

Social Enterprises and Changing Legal Forms, 9:30 a.m.

Mark Loewenstein, University of Colorado Law School

William H. Clark, Jr., Drinker Biddle & Reath LLP

Haskell Murray, Belmont University College of Business

Russell Menyhart, Taft Stettinius & Hollister LLP

Sourcing Dilemmas in a Globalized World, 11:00 a.m.

Steve Slezak, University of Cincinnati College of Business

Marsha A. Dickson, University of Delaware Department of Fashion & Apparel Studies

Tianlong Hu, Renmin University of China Law School

Anita Ramasastry, University of Washington School of Law

CSR and the Closely Held Company, 1:15 p.m.

Eric Chaffee, The University of Toledo College of Law

Michael Petrucci, FirstGroup America, Inc.

Lisa Wintersheimer Michel, Keating Muething & Klekamp PLL

Sourcing From the Enterprise Perspective, 2:30 p.m.

Christopher Bedell, The David J. Joseph Company

Walter Spiegel, Standard Textile Co. Inc.

Martha Cutright Sarra, The Kroger Co.

Conclusion, 3:30 p.m.

Free Web Seminar: The Opportunities and Pitfalls of Cybersecurity and Data Privacy in Mergers and Acquisitions

One of my two former firms, King & Spalding, is hosting a free interactive web seminar on cybersecurity and M&A on February 25 at 12:30 p.m. Thought the web seminar might be of interest to some of our readers. The description is reproduced below.

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An Interactive Web Seminar

The Opportunities and Pitfalls of Cybersecurity and Data Privacy in Mergers and Acquisitions

February 25, 2016

12:30 PM – 1:30 PM

Over the last several years, company after company has been rocked by cybersecurity incidents. Moreover, obligations relating to cybersecurity and data privacy are rapidly evolving, imposing on corporations a complex and challenging legal and regulatory environment. Cybersecurity and data privacy deficiencies, therefore, might pose potentially significant business, legal, and regulatory risks to an acquiring company. For this reason, cybersecurity and data privacy are becoming integral pre-transaction due diligence items.

This e-Learn will analyze the (1) special cybersecurity and data privacy dangers that come with corporate transactions; (2) strategies to mitigate those dangers; and (3) benefits of incorporating cybersecurity and data privacy into due diligence. The panel will zero in on these issues from the vantage point of practitioners in the deal trenches, and from the perspective of a former computer crime prosecutor and a former FBI agent who have dealt with a broad range of cyber risks to public and private corporations.  This e-Learn is for managers and attorneys at all levels who are involved at any stage of the M&A process and at any stage of cyber literacy, from the beginner who is just starting to appreciate the complex nature of cyber risks to the expert who has addressed them for years.  The discussion will leave you with a better understanding of this critical topic and concrete, practical suggestions to bring back to your M&A team.

Program Speakers

Robert Leclerc, King & Spalding’s Corporate Practice Group and experienced deal counsel; Nick Oldham, King & Spalding, and Former Counsel for Cyber Investigations, DOJ's National Security Division; John Hauser, Ernst & Young, and former FBI Special Agent specializing in cyber investigations.             

Click Here to Register.

Does Anyone Dare Take the Securities Act Literally?

“[T]he effective date of a registration statement shall be the twentieth day after the filing thereof.” That statement, in section 8(a) of the Securities Act of 1933,  makes the process seem so reassuringly quick and simple. If I want to offer securities to the public, I file a registration statement with the SEC and, less than three weeks later, I’m ready to go. But, as every securities lawyer knows, it isn’t really that easy.

It can take months for the registration statement in an IPO to become effective. The statutory deadline is circumvented through the use of a delaying amendment, a statement in the registration statement that automatically extends the 20-day period until the SEC has finished its review. See Securities Act Rule 473, 17 C.F.R. § 230.473.

But wouldn’t it be so much more conducive to capital formation if there really was a hard 20-day deadline? I understand that the SEC doesn’t have the staff to complete a full review in that time frame, but it would force them to focus on the important disclosure issues rather than some of the trivialities one sees in the current comment letters.

I’d like to see someone test that automatic 20-day effectiveness—file a complete registration statement without the delaying amendment and wait to see what happens. The issuer would, of course, be stuck with a price set 20 days before sale, because section 8(a) provides that amending the registration statement resets the 20-day clock. But that’s not the biggest problem.

The biggest problem is that the SEC would undoubtedly seek a stop order under section 8(d) of the Act. It’s only supposed to do that if it appears the registration statement contains a materially false statement or omits a material fact required to be included or necessary to keep the registration statement from being misleading. But I have no doubt that the SEC staff would argue that something in the registration statement was materially misleading, no matter how complete and carefully crafted it was.

Still, it would be nice to see someone try, just to see the SEC scramble to deal with such an unprecedented lack of obeisance. Unfortunately, no one would risk it—unless . . . Mr. Cuban?

ICYMI: Tweets From the Week (Feb. 21, 2015)

.@MarthaMcCluskey, @FrankPasquale & @jentaub: "Law and Economics: Contemporary Approaches" https://t.co/5anqbvjljo #corpgov

— Stefan Padfield (@ProfPadfield) February 15, 2016

"an alternative corporate veil, facilitated by..fact that..control..is concealed..by financial engineering" https://t.co/QtTMd8OC7i #corpgov

— Stefan Padfield (@ProfPadfield) February 16, 2016

"Whether corporations have rights, and the sort of rights they have, is a question of moral theory." https://t.co/Cb2Ffs4aIA #corpgov

— Stefan Padfield (@ProfPadfield) February 16, 2016

"influence..businesses..have over those that monitor them..could..result in..business ethics becoming..less viable" https://t.co/Q6TgnQKcEh

— Stefan Padfield (@ProfPadfield) February 16, 2016

"companies have been able to import goods produced with forced labor [to satisfy] 'consumptive demand'" https://t.co/yShEmXmAHj #corpgov

— Stefan Padfield (@ProfPadfield) February 17, 2016

"the 10 most significant human rights issues impacting business in the coming year" https://t.co/5QagyZgRcM #corpgov

— Stefan Padfield (@ProfPadfield) February 20, 2016

Of Research Analysts and Opinions

A couple of days ago, the SEC announced that it had filed a settled administrative action against former Deutsche Bank research analyst Charles Grom. The administrative order is interesting because it gives a little glimpse into the lives of sell-side research analysts in the wake of early 2000s reforms. It also serves as an object lesson in the failures of attempts to “level the playing field” regarding access to inside information.

[More under the cut]

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Comin' Back Atcha, Josh, on Partnerships and the Requirement of a Contract

I love your most recent post, Josh, and have been truly enjoying the ensuing commentary/conversation. I took on the “is it a contract?” issue in the LLC context because of questions similar to those raised in your post and in the comments it generated. I admit that the partnership issue on which you posted has fascinated me for quite some time. (I first encountered it when I undertook to teach Business Associations almost 16 years ago . . . .)

I have to push back on your analysis a bit, however.  In particular, here’s the part of your post with which I have some trouble:

There must be an agreement to associate for a purpose. To me, that requires consideration and assent.  If one has associated sufficiently under the law to make one both a partner and an agent of another (and thus liable for the partner), I don’t see how there is a lack of sufficient consideration or assent to form a contract.

Why does an association for a purpose require an agreement? To "associate" is to combine, connect, or link. The concept of an association builds from that: "connection or combination" or "an organization of people with a common purpose and having a formal structure."  It is clear in the comments to the RUPA that the drafters use "associate" and "association" in these common forms. In fact, the drafters refer to various forms of association created under other statutes, including “corporations, limited partnerships, and limited liability companies.” See RUPA Section 202, cmt 2.  

It is the association--of two or more persons to carry on as co-owners a business for profit--that creates an agency relationship and third-party liability for the obligations of the firm (unless the parties separately agree to those matters--which they may do independently or coincident with the formation of a partnership).  Those parts of the relationship are attributes of a partnership--aspects of the relationship that flow from the legal conclusion that a partnership has been formed. In other words, because of the formation of a partnership, the partners are agents of the partnership and are liable for partnership obligations.

Even assuming an agreement, however, it certainly is true that not every agreement is a contract.  Offer, acceptance, and (as you note) consideration would be required at common law to form a contract.  (Mohsen adds value to that analysis as well in his comment, even if he refers to the partnership agreement as opposed to partnership formation.)  Partners may and do, in fact, contract with each other under that legal meaning.  But I am not confident that a contract is required.  

Tell me what I am missing in all this . . . .

Parenthetically, I will note that I am extending my work on LLC operating agreements as contracts (referenced favorably at the outset in your post, for which I thank you) in future work, and I will be presenting the preliminary ideas on that at KCON XI next weekend in San Antonio.  It will be interesting to share some of these ideas with folks for whom contracts is their primary area of legal inquiry.  And since my associate dean is making noises about me teaching contracts sometime soon, I'd best get myself up to speed with the experts in any case . . . .

 

2016-17 Business Law Faculty Visitor Sought - The University of Tennessee College of Law

I am posting this at the request of our Associate Dean for Academic Affairs, Alex Long:

The University of Tennessee invites applications for a possible visiting professor for the fall or spring semester in 2016-17. The position would involve teaching Business Associations and one other business-related course (including, perhaps, Contracts I or II). If interested, please submit a CV and cover letter via email to Alex Long, Associate Dean for Academic Affairs & Professor of Law, The University of Tennessee College of Law at [email protected]. Prior teaching experience (law school or broader university teaching) is strongly preferred. The closing date for applications is Monday, February 29, 2016.

I also am happy to respond to questions about this opening.