The Nexus of Forums: A Contractual Theory of Jurisdiction Over the Corporation

Abstract

The private international legal rules applicable to the assertion of jurisdiction over corporations have remained basically the same over the last fifty years. This article examines the role and content of jurisdiction rules by synthesizing of private international law with the contractual theory of the corporation. This synthesis helps to illuminate the important role of jurisdiction in any exposition of the rights arising from corporate contracts. The economic theory that describes the relative desirability of alternative legal rules applicable to corporate contracts is also useful in the analysis of jurisdictional rules. We show that the ontological assumptions underpinning extant jurisdictional rules are specious and the rules themselves are probably inefficient. The article proposes, amongst other things, a more liberal entitlement to assert jurisdiction over a corporation in contract cases, as a means of directing parties to state their jurisdictional preferences ex ante.

JEL Classification: K22, K41