Regulatory Competition and Freedom of Contract in U.S. Corporate Law

11 Pages Posted: 9 May 2016 Last revised: 9 Jun 2016

Marco Ventoruzzo

Pennsylvania State University, Penn State Law; Bocconi University - Department of Law

Date Written: May 7, 2016

Abstract

The real dynamics of U.S. regulatory competition in corporate law are often misunderstood. As convincingly demonstrated by some authors (Kahan and Kamar), most States are not actively engaged in the market for charters, and Delaware's position is substantially unchallenged. From this starting point, in this short paper presented at the Conference of the Sixtieth Anniversary of the Italian Rivista delle società in 2015, after a brief critical discussion of the actual nature of this "competition" based also on empirical evidence, I examine some recent reforms of the Delaware General Corporation Act in the area of corporate litigation (on fee-shifting bylaws and exclusive forum selection clauses), which affect contractual freedom in corporate bylaws and seem to confirm the theoretical framework illustrated. In light of these results, I offer some implications for the also peculiar type of regulatory competition emerging in Europe, and indicate some consequences that European policy makers should take into account.

Keywords: Regulatory Competition, Delaware, Fee-Shifting by Laws, Forum Selection Clauses, European Union, Contractual Freedom

JEL Classification: K22

Suggested Citation

Ventoruzzo, Marco, Regulatory Competition and Freedom of Contract in U.S. Corporate Law (May 7, 2016). Bocconi Legal Studies Research Paper; Penn State Law Research Paper No. 11-2016. Available at SSRN: https://ssrn.com/abstract=2776945 or http://dx.doi.org/10.2139/ssrn.2776945

Marco Ventoruzzo (Contact Author)

Pennsylvania State University, Penn State Law ( email )

Lewis Katz Building
University Park, PA 16802
United States

HOME PAGE: https://law.psu.edu/faculty/ventoruzzo

Bocconi University - Department of Law ( email )

Via Roentgen 1
Milan, 20136
Italy

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