In the analysis of vertical integration by contract versus ownership one event has dominated the discussion - General Motors' merger with Fisher Body in 1926. The debates have all been premised on the assumption that the ten-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.
Victor P. Goldberg,
Lawyers Asleep at the Wheel? The GM-Fisher Body Contract,
Columbia Law and Economics Working Paper No. 316
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/1499