The gambling agreement provides an elastic adjustment mechanism for the valuationdivergence in private equity financing,and it conforms to the"incentive compatibility"value concept on the principal-agent model,and is a contractual arrangement that can effectively amplify social benefits. The effectiveness of the gambling agreement with the target company as the opposite party should not be negatively evaluated due to potential contract performance obstacles(ie,the execution of the gambling clause may harm the company or the creditor’s interest). At the same time,the gambling agreement with the target company as the opposite party does not violate the mandatory provisions of Article 20 of the Company Law,and is in compliance with the conditions of the contract and does not have the invalid situation listed in the Article 52 of the Contract Law. As a result,its validity should be recognized.
Journal of Jimei University:Philosophy and Social Sciences