Reevaluating Galaviz v. Berg: An Analysis of Forum-Selection Provisions in Unilaterally Adopted Corporate Bylaws as Requirements Contracts

In the wake of a passing comment and footnote in
In re Revlon, Inc. Shareholders Litigation, Delaware practitioners have grappled with the enforceability of
forum‐selection provisions adopted in corporate charters and bylaws.
After the Delaware Chancery Court decided In re Revlon in 2010, most practitioners concluded that such a
provision would be enforceable under Delaware corporate law. However in 2011, in Galaviz v. Berg—a case of first impression—
the Northern District of California rejected the contention in In re Revlon that forum‐selection provisions adopted by Delaware
corporations should be contractually enforceable. The court in Galaviz instead held that a forum‐selection provision contained in a bylaw
unilaterally adopted by a board of directors was not binding on shareholders under federal procedural law governing forum‐selection provisions.
Still, given the uncertainty regarding the enforceability of forum‐selection provisions in other jurisdictions, many practitioners continue
to advise companies to adopt these provisions “just in case.”

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