Exclusive Forum Selection Bylaws Upheld In Delaware

    View Author July 2013

    On June 25, 2013, the Delaware Court of Chancery upheld the validity of forum selection bylaws unilaterally adopted by the boards of directors of Chevron Corporation and FedEx Corporation, both Delaware corporations. The consolidated ruling resolved two common questions of law with respect to these provisions, finding: (i) that the challenged bylaws are valid under the Delaware General Corporation Law, and (ii) that the challenged bylaws are contractually valid and enforceable as forum selection clauses.

    The court's decision does not eliminate all possibility of challenges to these types of provisions, the ruling provides clarity on the threshold question of a board of directors’ general authority under Delaware law to adopt forum selection bylaws and context for consideration of the appropriateness and usefulness of the board’s adoption of such provisions.