Litigation Rights and the Corporate Contract
Book Chapter in: The Corporate Contract in Changing Times (U. Chicago Press, 2017), Forthcoming
20 Pages Posted: 8 Feb 2017 Last revised: 10 Feb 2017
Date Written: February 8, 2017
Are corporate charters and bylaws contracts? What is the scope or subject matter of the corporate contract? Is access to litigation part of the bundle of rights that shareholders purchase when they buy shares in a corporation? This book chapter, “Litigation Rights and the Corporate Contract,” examines how one controversial innovation has pushed courts and legislatures to address these fundamental questions about the nature and scope of the corporate contract. That innovation was the use of corporate charter provisions and bylaws to set the rules for resolving internal disputes, especially for shareholder litigation. The emergence of exclusive forum and fee-shifting bylaws pushed lawmakers to be newly explicit about the role of corporate organizational documents. The questions and initial answers have broad implications, reaching all of the ways charters and bylaws define the relationships within the corporation. The emergence of dispute resolution provisions made them express and potentially urgent.
Keywords: corporate, bylaws, charter, exclusive forum, fee-shifting, Boilermakers, ATP, corporate contract, shareholder litigation, shareholder consent
JEL Classification: K12, K20, K22
Suggested Citation: Suggested Citation