An Empirical Investigation of the Terms of Corporate Charters and Influences on Term Standardization in a Laissez-Faire Environment

More than fifty years before the debate about the contractibility of corporate law in the United States, English and then Australian lawmakers truncated what had been substantial scope for contracting around directors' duties. Legislation imposed mandatory rules concerning conflicts of interest and release of officer liability which substantially survive to this day. This article offers evidence on the form that corporate governance contracts took in Australia prior to the introduction of this legislation. Evidence demonstrates pervasive alteration of default rules. Although there is evidence of increasing standardisation in the terms selected and of the extent of previous adoptions influencing the choice of terms, the evidence does not support the distinctive lock-in claims made by theories of network externalities. The paper also demonstrates the critical role of precedents manuals in contract innovation.