Enhancing the Promise of Exclusive Forum Clauses by Having Stockholders Consent to the Jurisdiction of the Selected Forum

August 12, 2013

Forum selection clauses for corporate internal affairs claims will reduce the number of instances in which the same case is brought on behalf of the same plaintiffs against the same fiduciaries for the same wrong. Chancellor Strine recently made clear that these clauses are enforceable under Delaware law. How other courts will react when fiduciaries seek to enforce such clauses in those courts remains an open question. One need not test the reception to such clauses in “foreign” courts, however, if there were jurisdiction in Delaware over stockholders who bring such suits elsewhere. This memorandum explains the benefits of such consent to jurisdiction provisions, how they should be limited, and why they should be valid.

If you have any questions, please feel free to contact any of your regular contacts at the firm or any of our partners and counsel listed under “Corporate Governance” located in the “Practices” section of the website.