Deals

This course trains students in the insights and skills that add value in sophisticated transactions. Specifically, lawyers constantly need to address two types of issues in these transactions.

First, although transactions vary in their details, every transaction involves problems of information and incentives that can discourage parties from entering into what otherwise would be value-maximizing arrangements. For example, the seller of an asset almost always has better information about it than the buyer does. This reality, combined with the fact that the seller is willing to sell, can cause buyers to be skeptical about the asset's quality and might even persuade them not to purchase it. A central responsibility of lawyers in transactions, then, is to help overcome these information and incentive problems. They do so with a range of contractual and organizational responses, such as due diligence, covenants, contingent purchase price, staged financing, and incentive compensation.

Second, legal and regulatory regimes sometimes are imperfectly drafted and conceptualized, so that economically similar arrangements are treated differently. These differences create possibilities for legal arbitrage, so that a change in the way the transaction is structured can yield dramatically better (or worse) treatment for the parties. More generally, sophisticated transactional lawyers must help their clients navigate regulatory hurdles, and the nature of the relevant regulations, and the way the parties respond, can determine whether a potentially promising business venture succeeds or fails.

This course develops these themes in a number of contexts, including mergers and acquisitions, venture capital, real estate, derivatives, publishing, motion pictures, and nonprofits.

For each class session, discussion questions are provided in advance. Students do not have to hand in answers to these questions, but should use them to prepare for class. These questions organize our class discussion and also offer guidance about which issues students should focus on in the course. Strong class participation can improve a student's grade.