The contractual or nexus-of-contracts theory serves as a normative foundation for both the stockholder and stakeholder conceptions of the firm. In this theory, each constituency or stakeholder group bargains with the firm over a set of rights that will protect the firm-specific assets that it makes available for production. This paper argues that the main difference between the stockholder and stakeholder conceptions lies in different assumptions about the choice of protections that each constituency would make. The value of this thesis is that it identifies the points at issue between these two conceptions in ways that facilitate a reconciliation.