Forum Selection Provisions in Corporate Charters and Bylaws: Validity vs. Enforceability
In the December 2013 issue of Business Law Today, an article authored by Meghan A. Adams discusses forum selection provisions in corporate charters and bylaws. Forum selection clauses are common provisions in many contracts. The United States Supreme Court has recognized the presumptive validity and enforceability of forum selection clauses since as early as 1972, in The Bremen v. Zapata Off-shore Co. The Delaware Supreme Court has also done so repeatedly, most recently in Ingres Corp. v. CA, Inc. in 2010. Until recently, however, very few public companies incorporated in Delaware had included forum selection clauses in their corporate charters or bylaws, even though charters and bylaws had long been held to be contracts between corporations and their stockholders.
This article was originally published in the American Bar Association Business Law Section's "Business Law Today."